Jones Lang LaSalle India has reported that office space absorption will grow by 68% this year.
Jones Lang LaSalle’s recent survey has reported that in the suburbs the office space absorption will be more this year. The growth of absorption is expected to be by 68%.
In 2012, the office space absorption grew by 60%. This rate is expected to be outperformed. The JLL survey has stated that the companies which plan of expansion will be more concentrating on the suburbs. This will boost office space absorption in the suburbs.
The existing commercial centers are losing its prominence. This will be more visible in the coming five years during which the companies will expand to the suburbs. The expansion is believed to take place within next four to five years.
The survey stated that suburban locations will determine the performance of office market. The companies aim to reduce their cost by shifting to suburban locations. Moreover they will be able to enjoy better facilities and amenities in these areas, however at lower costs.
Even when they are enjoying better amenities like car parking and other facilities, they will have to spend comparatively lower amount in the form of rents.
In 2012, 26.7 million sq. ft. of office space was absorbed. Around sixty percent of the total absorption was done in the suburban locations. They remained accountable for around 16.6 million sq. ft. This rate is still expected to rise up to 19.2 million sq. ft. this year.
The rise of office space absorption in the suburbs shows a shift in the commercial activities in the Subcontinent. The survey adds that there will be more commercial activities in suburbs in the coming years.
Companies, planning to move to suburbs, are sure that they can enjoy more space and amenities at lower rates. However this will have an impact on the demand for office space in central business districts.