Rise in office space demand sees big bets from property developers

With demand for office space on the rise again, after the pandemic-induced disruption, property developers are betting on big projects and are looking to add millions of square feet of office properties in the next three to five years, according to a report by Business Standard. Office spaces of 30.1 million sq ft were absorbed last year as against the fresh supply of 34.8 million sq ft. In 2019, there was an absorption of 44.8 million sq ft as compared to the new supply of 33.4 sq ft.

Colliers, a property consultant is expecting a supply of fresh office property between 33 and 38 million sq ft every year in the next three years, including the current one.

The demand for workspace is mainly backed by technology companies, with Bengaluru based developers like RMZ, Prestige Estates, and Embassy Office Parks REIT leading from the front in adding spaces.

Bengaluru to see maximum number of office spaces

RMZ reported that sectors like IT/ITES, BFSI and health sciences have been performing well in 2020, and also added that clients have been increasing their real estate footprint, by increasing their head count and acquiring new business verticals. Further the company has 30 million sq ft under various stages of construction in markets across Chennai, Bengaluru, Hyderabad and Mumbai. It would also be developing four million square feet by the end of 2022.

On the other hand, Prestige developers is looking to add 40 million sq ft in the next five years, out of which Bengaluru will have 28 million sq ft.

In the coming three years, Embassy Office Parks REIT is looking to deliver 5.7 million sq ft of projects. According to the company, 70% of the development is in Bengaluru. It also added that 100% of our near-term delivery is already pre-committed to JP Morgan.