{"id":15061,"date":"2020-10-05T08:42:08","date_gmt":"2020-10-05T08:42:08","guid":{"rendered":"https:\/\/yourchennai.com\/?p=15061"},"modified":"2020-10-05T08:42:08","modified_gmt":"2020-10-05T08:42:08","slug":"office-absorption-up-64-in-q3-vs-q2-2020-new-completions-increase-59-jll","status":"publish","type":"post","link":"https:\/\/yourchennai.com\/index.php\/2020\/10\/05\/office-absorption-up-64-in-q3-vs-q2-2020-new-completions-increase-59-jll\/","title":{"rendered":"Office absorption up 64% in Q3 vs Q2 2020, new completions increase 59%: JLL"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div><ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\"><em> Bengaluru and Hyderabad account for 80% net absorption in Q3, also witness maximum growth in new completions<\/em><\/li>\n<li style=\"font-weight: 400;\"><em> Vacancy in Grade A offices marginally up from 13.1% in Q2 2020 to 13.5% in Q3 2020<\/em><\/li>\n<li style=\"font-weight: 400;\"><em> Vacancy levels in Bengaluru, Chennai and Pune stayed in single digits<\/em><\/li>\n<\/ul>\n<p style=\"font-weight: 400; text-align: justify;\">India\u2019s office market witnessed a net absorption of 5.4 million sq ft in quarter ending September 2020 (Q3), an increase of 64% versus quarter ending June 2020 (Q2). This is an encouraging trend especially after net absorption dipped almost at a similar rate in the second quarter, <strong>according to JLL Research<\/strong>.<\/p>\n<p style=\"font-weight: 400; text-align: justify;\">The third quarter office rebound growth was led by Bengaluru and Hyderabad, which together accounted for nearly 80% of the net absorption in Q3 2020.\u00a0The heightened activity in Bengaluru indicates a gradual resurgence in take up of spaces coupled with the translation of pent up demand from Q2 this year.<\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><strong>Net absorption[1]\u00a0gaining pace<\/strong><\/p>\n<table style=\"font-weight: 400;\" width=\"93%\">\n<tbody>\n<tr>\n<td width=\"17%\">&nbsp;<\/td>\n<td width=\"23%\"><strong>Q2 2020 (mn sq ft)<\/strong><\/td>\n<td width=\"22%\"><strong>Q3 2020 (mn sq ft)<\/strong><\/td>\n<td width=\"36%\"><strong>Growth (%) &#8211; Q3 2020 over Q2 2020<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"17%\">Bengaluru<\/td>\n<td width=\"23%\">0.45<\/td>\n<td width=\"22%\">2.72<\/td>\n<td width=\"36%\">504%<\/td>\n<\/tr>\n<tr>\n<td width=\"17%\">Chennai<\/td>\n<td width=\"23%\">0.10<\/td>\n<td width=\"22%\">0.21<\/td>\n<td width=\"36%\">110%<\/td>\n<\/tr>\n<tr>\n<td width=\"17%\">Delhi NCR<\/td>\n<td width=\"23%\">0.50<\/td>\n<td width=\"22%\">0.20<\/td>\n<td width=\"36%\">-60%<\/td>\n<\/tr>\n<tr>\n<td width=\"17%\">Hyderabad<\/td>\n<td width=\"23%\">1.18<\/td>\n<td width=\"22%\">1.54<\/td>\n<td width=\"36%\">31%<\/td>\n<\/tr>\n<tr>\n<td width=\"17%\">Kolkata<\/td>\n<td width=\"23%\"><em>Negligible<\/em><\/td>\n<td width=\"22%\"><em>0.02<\/em><\/td>\n<td width=\"36%\">&#8211;<\/td>\n<\/tr>\n<tr>\n<td width=\"17%\">Mumbai<\/td>\n<td width=\"23%\">0.45<\/td>\n<td width=\"22%\">0.28<\/td>\n<td width=\"36%\">-38%<\/td>\n<\/tr>\n<tr>\n<td width=\"17%\">Pune<\/td>\n<td width=\"23%\">0.64<\/td>\n<td width=\"22%\">0.46<\/td>\n<td width=\"36%\">-28%<\/td>\n<\/tr>\n<tr>\n<td width=\"17%\"><strong>Total<\/strong><\/td>\n<td width=\"23%\"><strong>3.32<\/strong><\/td>\n<td width=\"22%\"><strong>5.43<\/strong><\/td>\n<td width=\"36%\"><strong>64%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p style=\"font-weight: 400; text-align: justify;\">Source: Real Estate Intelligence Service (REIS), JLL Research<\/p>\n<p style=\"font-weight: 400; text-align: justify;\">\u201cWhile we continue to see the impact of the pandemic on various businesses, there is a significant surge in activity across most office markets under consideration. This is seen in gross leasing<strong>\u00a0<\/strong>which more than doubled from the previous quarter at 13.8 million sq ft. At the same time, it is important to note that large and mid-sized occupiers across major markets continue to review their real estate portfolios in a bid to optimise cost, higher emphasis is being given on sustainability and employee well-being as well as adoption of flexible working practices.\u201d\u00a0<strong>said Ramesh Nair, CEO and Country Head, India, JLL<\/strong>.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-medium wp-image-13891\" src=\"https:\/\/yourchennai.com\/wp-content\/uploads\/2020\/05\/JLL-Logo-300x167.jpg\" alt=\"JLL Logo\" width=\"300\" height=\"167\" srcset=\"https:\/\/yourchennai.com\/wp-content\/uploads\/2020\/05\/JLL-Logo-300x167.jpg 300w, https:\/\/yourchennai.com\/wp-content\/uploads\/2020\/05\/JLL-Logo-768x427.jpg 768w, https:\/\/yourchennai.com\/wp-content\/uploads\/2020\/05\/JLL-Logo-715x400.jpg 715w, https:\/\/yourchennai.com\/wp-content\/uploads\/2020\/05\/JLL-Logo.jpg 900w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/p>\n<p style=\"font-weight: 400; text-align: justify;\">While the share of IT\/ITeS occupiers in gross leasing<strong>[2]<\/strong>\u00a0dipped to 43% in Q3 2020 from 61% in Q2 2020, e-commerce and manufacturing sectors gained significant shares during the third quarter forming 16% (negligible in Q2 2020) and 17% (5% in Q2 2020) respectively, owing to surging demand of e-commerce during COVID19.<\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><strong>Confidence in new completions<\/strong><\/p>\n<p style=\"font-weight: 400; text-align: justify;\">New completions during Q3 2020 increased by 59% quarter-on-quarter with 9.2 million sq ft of new stock coming to market.. \u201cWith lockdown restrictions being relaxed in the third quarter in most of the markets under review, office projects in the final stages of construction or pending receipt of occupancy certificates came onboard. This resulted in an increase in the supply of office space, even surpassing 8.6 million sq ft witnessed in Q1 2020,\u201d\u00a0<strong>said Dr. Samantak Das, Chief Economist and Head of Research &amp; REIS, India, JLL<\/strong>.<\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><strong>New completions rebound<\/strong><\/p>\n<table style=\"font-weight: 400;\" width=\"94%\">\n<tbody>\n<tr>\n<td width=\"18%\"><\/td>\n<td width=\"22%\"><strong>Q2 2020 (mn sq ft)<\/strong><\/td>\n<td width=\"22%\"><strong>Q3 2020 (mn sq ft)<\/strong><\/td>\n<td width=\"36%\"><strong>Growth (%) \u2013 Q3 2020 over Q2 2020<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"18%\">Bengaluru<\/td>\n<td width=\"22%\">0.0<\/td>\n<td width=\"22%\">4.70<\/td>\n<td width=\"36%\">&#8211;<\/td>\n<\/tr>\n<tr>\n<td width=\"18%\">Chennai<\/td>\n<td width=\"22%\">0.0<\/td>\n<td width=\"22%\">0.0<\/td>\n<td width=\"36%\">&#8211;<\/td>\n<\/tr>\n<tr>\n<td width=\"18%\">Delhi NCR<\/td>\n<td width=\"22%\">1.94<\/td>\n<td width=\"22%\">0.22<\/td>\n<td width=\"36%\">-89%<\/td>\n<\/tr>\n<tr>\n<td width=\"18%\">Hyderabad<\/td>\n<td width=\"22%\">2.38<\/td>\n<td width=\"22%\">3.33<\/td>\n<td width=\"36%\">40%<\/td>\n<\/tr>\n<tr>\n<td width=\"18%\">Kolkata<\/td>\n<td width=\"22%\">0.0<\/td>\n<td width=\"22%\">0.0<\/td>\n<td width=\"36%\">&#8211;<\/td>\n<\/tr>\n<tr>\n<td width=\"18%\">Mumbai<\/td>\n<td width=\"22%\">1.45<\/td>\n<td width=\"22%\">0.30<\/td>\n<td width=\"36%\">-79%<\/td>\n<\/tr>\n<tr>\n<td width=\"18%\">Pune<\/td>\n<td width=\"22%\">0.0<\/td>\n<td width=\"22%\">0.63<\/td>\n<td width=\"36%\">&#8211;<\/td>\n<\/tr>\n<tr>\n<td width=\"18%\"><strong>Total<\/strong><\/td>\n<td width=\"22%\"><strong>5.77<\/strong><\/td>\n<td width=\"22%\"><strong>9.18<\/strong><\/td>\n<td width=\"36%\"><strong>59%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p style=\"font-weight: 400; text-align: justify;\">\u00a0Source: Real Estate Intelligence Service (REIS), JLL Research<\/p>\n<p style=\"font-weight: 400; text-align: justify;\">In sync with net absorption, Bengaluru and Hyderabad led the increase in new completions accounting for 87% of the total new completions in Q3 2020. Notably, new completions in both these markets even went past the average new completion levels witnessed in the four quarters of 2019.<\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><strong>Vacancies go up in Grade A offices<\/strong><\/p>\n<p style=\"font-weight: 400; text-align: justify;\">Increased office space consolidation and optimisation strategies of corporate occupiers resulted in subdued net absorption levels, which could not keep pace with new completions. This resulted in overall vacancy increasing from 13.1% in Q2 2020 to 13.5% in Q3 2020. Despite the rise in vacancy levels in southern markets, Bengaluru,\u00a0 Chennai and Pune continued to hover in single digits. This augurs well for a strong rebound in these markets when economic and business conditions improve in the coming quarters.<\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><strong>Vacancy in Grade A office<\/strong><\/p>\n<table style=\"font-weight: 400;\" width=\"68%\">\n<tbody>\n<tr>\n<td width=\"26%\"><\/td>\n<td width=\"36%\"><strong>As of Jun 30 2020 (%)<\/strong><\/td>\n<td width=\"36%\"><strong>As of Sep 30 2020 (%)<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"26%\">Bengaluru<\/td>\n<td width=\"36%\">5.3%<\/td>\n<td width=\"36%\">6.5%<\/td>\n<\/tr>\n<tr>\n<td width=\"26%\">Chennai<\/td>\n<td width=\"36%\">7.9%<\/td>\n<td width=\"36%\">7.6%<\/td>\n<\/tr>\n<tr>\n<td width=\"26%\">Delhi NCR<\/td>\n<td width=\"36%\">28.0%<\/td>\n<td width=\"36%\">27.9%<\/td>\n<\/tr>\n<tr>\n<td width=\"26%\">Hyderabad<\/td>\n<td width=\"36%\">9.2%<\/td>\n<td width=\"36%\">11.3%<\/td>\n<\/tr>\n<tr>\n<td width=\"26%\">Kolkata<\/td>\n<td width=\"36%\">26.4%<\/td>\n<td width=\"36%\">26.3%<\/td>\n<\/tr>\n<tr>\n<td width=\"26%\">Mumbai<\/td>\n<td width=\"36%\">13.4%<\/td>\n<td width=\"36%\">13.4%<\/td>\n<\/tr>\n<tr>\n<td width=\"26%\">Pune<\/td>\n<td width=\"36%\">4.4%<\/td>\n<td width=\"36%\">4.7%<\/td>\n<\/tr>\n<tr>\n<td width=\"26%\"><strong>Total<\/strong><\/td>\n<td width=\"36%\"><strong>13.1%<\/strong><\/td>\n<td width=\"36%\"><strong>13.5%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p style=\"font-weight: 400; text-align: justify;\">Source: Real Estate Intelligence Service (REIS), JLL Research<\/p>\n<p style=\"font-weight: 400; text-align: justify;\"><strong>Rentals across markets remain stable<\/strong><\/p>\n<p style=\"font-weight: 400; text-align: justify;\">Except for Bengaluru which witnessed a marginal increase in rents, office rents in Q3 2020 vs Q2 2020 remained stable across all markets under review. With stable rental values and low vacancy levels, the office market in India continues to be landlord favourable. However, it is important to note that landlords across markets have become more flexible in providing increased rent free periods, reduced rental escalation and fully furnished deals to prominent occupiers which reduces their net outgo.<\/p>\n<div id=\"m_-3924888937786415516ftn1\">\n<p class=\"m_-3924888937786415516MsoFootnoteText\"><span class=\"m_-3924888937786415516MsoFootnoteReference\"><span lang=\"EN-SG\"><em>[1]<\/em><\/span><\/span><em><span lang=\"EN-SG\">\u00a0<\/span><span lang=\"EN-US\">Net absorption refers to net office space take up during the quarter.<u><\/u><u><\/u><\/span><\/em><\/p>\n<\/div>\n<div id=\"m_-3924888937786415516ftn2\">\n<p class=\"m_-3924888937786415516MsoFootnoteText\"><em><span class=\"m_-3924888937786415516MsoFootnoteReference\"><span lang=\"EN-SG\">[2]<\/span><\/span><span lang=\"EN-SG\">\u00a0<\/span><span lang=\"EN-US\">Gross leasing refers to total office space take up and includes precommitment in upcoming office buildings and excludes renewals<\/span><\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Bengaluru and Hyderabad account for 80% net absorption in Q3, also witness maximum growth in new completions Vacancy in Grade A offices marginally up<\/p>\n","protected":false},"author":1,"featured_media":13891,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30,33],"tags":[83,954,18319,16548,19625,14440,47,674],"class_list":["post-15061","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-business-political-national-realestate","category-realestate-housing-apartments-affordable-seniorliving","tag-bengaluru","tag-chennai","tag-jll","tag-office-absorption","tag-office-market","tag-office-space","tag-pune","tag-real-estate"],"views":669,"jetpack_featured_media_url":"https:\/\/yourchennai.com\/wp-content\/uploads\/2020\/05\/JLL-Logo.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/posts\/15061","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/comments?post=15061"}],"version-history":[{"count":1,"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/posts\/15061\/revisions"}],"predecessor-version":[{"id":15062,"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/posts\/15061\/revisions\/15062"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/media\/13891"}],"wp:attachment":[{"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/media?parent=15061"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/categories?post=15061"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yourchennai.com\/index.php\/wp-json\/wp\/v2\/tags?post=15061"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}