Amidst the current unprecedented economic situation, Bengaluru continues to be one of the leading drivers of leasing in India, according to real estate consultants JLL. The city witnessed the largest ever influx of FDI in commercial real estate market as marquee foreign real estate funds reportedly invested approximately $ 4 billion to increase their portfolio of core assets.
“Bengaluru continues to dominate office leasing market with an overall net absorption of 7.5 million sq ft in 2020. While the vacancy is likely to rise to 13-14% in the coming year, large e-commerce companies, BFSI & healthcare sector occupiers are evaluating additional growth and consolidation”, said Rahul Arora, Managing Director (Bengaluru), JLL India.
“The city has remained a landlord favourable office market for several years. With slowdown in construction and lack of funding, this trend is expected to continue”, he added.
While approximately 11 million sq ft was expected to be added, just 9 million sq ft was completed in during the year as developers focused on pre-committed spaces and went slow on the speculative space. Many small to mid-sized occupiers terminated spaces within the CBD & SBD markets which led to an increase in the overall vacancy
The vacancy levels are expected to rise to 14%. ORR (Z1-Z3) and SBD City continued to be the most preferred micro-markets for occupiers, whileWhitefield, North Bengaluru (N2) and West Bengaluru continued to witness increase in vacancy levels or stagnation of rentals with limited occupier interests. The headline rentals across the city remained stable with developers offering softer commercial terms such as extended rent-free periods.
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