New Delhi [India], June 19 : 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 & South Delhi in Delhi-NCR features prominently in the list of micro markets having highest rentals in India.
Almost 30 per cent of the office micro markets in India have sub 10 per cent vacancy levels, compared to the 16.2 per cent overall office market vacancy at India level.
In fact, owing to demand significantly outpacing supply in recent years, Goregaon/JVLR, CBD, Thane, LBS/Eastern Suburbs & BKC in Mumbai and Aerocity, Cybercity & 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 & 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 & supply since 2020.
These high-activity micro markets collectively accounted for two-thirds & three-fourths of India's Grade A office demand & supply respectively since 2020. Of these, 4 high-activity micro markets are in Bengaluru, 3 each in Delhi NCR & Pune, 2 each in Chennai & Hyderabad, and 1 in Mumbai.
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