India’s office real estate sector was decidedly vibrant in 2019, with demand for Grade A office space spiralling upward while vacancy levels in prime locales reduced. India’s first REITs received an overwhelming response and within just six months of its launch, its value increased over 37%. Thanks to REITs, India entered the league of mature markets in 2019.

India also jumped to 63rd position in World Bank’s 'Ease of Doing Business 2020' report, both reflecting and attracting the confidence of both local and global entities. Unlike in previous years when most funds looked at only income-yielding assets in commercial real estate, 2019 saw major funds focus on the development of office assets.

Post the global WeWork debacle, India’s co-working boom came under closer scrutiny and raised some pertinent questions about this 'poster-boy' of Indian commercial space. However, the demand for co-working spaces in the country by entrepreneurs, tech start-ups and even big multi-nationals remains strong and growing.

By December-end, office supply in 2019 will have risen by 13% against 2018, touching 43.3 mn sq. ft. this year as against 38.2 mn sq. ft. in 2018
Absorption will have seen a 11% yearly growth in 2019, to touch approx. 37 mn sq. ft. and thereby reaching 2015 levels.
Commercial spaces continued to attract maximum PE investments, totalling close to USD 3 bn funds in the first three quarters of 2019. In the corresponding period of 2018, total inflows within this segment equalled nearly USD 2.1 bn, thus rising by 43% in a year.
Vacancy levels have also come down from 14.6% in 2018 to nearly 14.3% in 2019 (vacancy was as high as 16.5% in 2013). The larger Indian cities will witness strong office absorption along with rising supply pipeline in the coming years.