5 office market trends to watch out for in 2016

At present, India is one of the key investment destinations in the world.  With the positive economic factors such as increase in manufacturing output, GDP growth over 7%, negative inflation rate, increased FDI and lowered interest rates etc., the real estate sector has a bright outlook for 2016.

Here are 5 major office market trends to watch out for this year:

IT/ITeS occupiers to drive the office demand:  Continuing the legacy, IT/ITeS will remain to be the key occupier. The reason why it is likely to grow in coming years is proactive Government support. The initiatives like ‘Start-up India’ and ease of doing business in India will definitely help to improve demand for office space in key cities and Tier II cities may also get benefited from this.  Apart from this, large consulting corporates and other frontline sectors like FMCG, BFSI, Telecom and manufacturing will keep the market on the run.

Hyderabad will be in a sweet spot: With affordability in rents and availability of large land tracks, Hyderabad is all set to grow.   The pro real estate policies by the newly formed Government are expected to make Hyderabad a potential investment destination. Major MNCs like Uber, Apple and Google have already planned to set up large office setups in Hyderabad in 2016.    

Affordable quality office tenancies will be the king: Well located, affordable and quality offices will be the key criteria of the occupiers in 2016 across cities. The office building with such traits will see good tenant retention.

New office supply will complement demand: Looking at the good absorption trend, developers are optimistic towards completing their ongoing projects in 2016, with which more than 32 million sq ft of new supply is expected to come in 8 major metros of India.  

Government policies to build a solid foundation: Making a policy for the any industry is not a cakewalk, although Government steps like raising FDI limits, guidelines for REITs (Real Estate Investment Trusts), implementation of real estate regulation bill, land bill, GST bill etc. will certainly bring policy level stability and trust among the occupiers and the investors group in India and abroad.


About the author

Sachin Sharma, Manager, Research, has more than 7 years of experience in the real estate sector, with proficiencies in market research and analysis, spanning all major real estate sectors, i.e commercial, residential, retail, industrial and land.

Sweeter 2016

2015 saw India as a relatively calmer but steadily active investment destination. With the foundation of the real estate industry well laid out now, 2016 is very ready for take-off.
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