Showing strong economic momentum in the prominent metro cities, micro markets of Delhi-NCR and Mumbai continued to lead in average rentals and lowest vacancy levels, according to the latest report by real estate consultancy firm Colliers. The report titled “India Office: Micro Market Insights” added that most of the micro markets in India have seen a rental appreciation compared to pre-pandemic levels.
Micro markets are similar to contemporary convenience stores, but they combine foodservice, refreshment, and vending services. Areas like Bandra-Kurla Complex, Central Business Districts (CBDs), Lower Parel, Worli-Prabhadevi, Goregaon/JVLR and Kalina in Mumbai, and CBD, Aerocity, Golf Course Road, and South Delhi in Delhi-NCR feature prominently in the list of micro markets having the highest rentals in India.
Almost 30 percent of the office micro markets in India have sub-10 percent vacancy levels, compared to the 16.2 percent overall office market vacancy at the India level. In fact, owing to demand significantly outpacing supply in recent years, Goregaon/JVLR, CBD, Thane, LBS/Eastern Suburbs, and BKC in Mumbai and Aerocity, Cybercity, and MG Road in Delhi NCR, CBD in Bengaluru, and Guindy in Chennai continue to have one of the lowest vacancy levels in the country.
“Interestingly, most of the micro markets which have seen high rental appreciation since 2020 had significantly high demand and supply as compared to the rest. Majority of these high-activity micro markets will continue to have potentially higher rental upside and are likely to lean towards landlords/developers,” said Vimal Nadar, National Director & Head of Research, Colliers India.
According to Nadar, occupiers will increasingly prefer sustainable elements and green-certified office buildings, in addition to the preference for premium offerings. “Consequently, average occupancy levels in green-certified buildings of these high-activity micro markets will be appreciably higher than occupancy levels of non-green certified buildings in respective micro markets,” Nadar added.
India’s office market has undergone a transformative shift, amidst continuous demand scale-up in the last few years. Interestingly, high-activity micro markets across the top seven cities of the country have been witnessing consistently high demand and supply since 2020. These high-activity micro markets collectively accounted for two-thirds and three-fourths of India’s Grade A office demand and supply respectively since 2020. Of these, four high-activity micro markets are in Bengaluru, three each in Delhi NCR and Pune, two each in Chennai and Hyderabad, and one in Mumbai.
(From ANI)
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