About 4-5 lakhs job opportunities are expected to be generated within the next two years in the major cities taking into account likely absorption of upcoming office space, according to global property consultant CBRE.
Bangalore and the national capital region are expected to contribute more than half of this total expected employment opportunity by the end of 2015.
"Employment opportunities to the tune of approximately 4-5 lakh are expected to be generated within the next two years across the country’s leading cities. In case India’s economic growth accelerates to above 6 per cent in 2015, more such opportunities may be expected," CBRE South Asia Chairman and Managing Director Anshuman Magazine said.
Quoting CBRE Research, he said over 70-80 million sq ft of new office space is anticipated to be ready for possession by 2015 in the top seven cities -- Delhi-NCR, Mumbai, Bangalore, Hyderabad, Chennai, Pune and Kolkata.
"Assuming about 60–65 per cent absorption levels for this upcoming office space, approximately four to five lakh employment opportunities may be realistically anticipated within the next two years," Magazine said.
IT/ITeS and allied services sectors are likely to account for a substantial chunk of this opportunity, followed by the banking, financial, services and insurance (BFSI) sectors; and distantly followed by research and consulting, pharmaceutical, engineering and manufacturing, and telecommunications.
Bangalore, Delhi-NCR and the Mumbai Metropolitan Region (MMR) are slated to account for nearly 75 per cent of this planned office space supply.
"With major corporate decision makers across Europe having indicated an increased appetite for global expansion into Indian markets, this expansion of modern, investment-grade office stock in the main cities of India will go a long way in meeting upcoming opportunities," Magazine said.
According to CBRE's European Occupier Survey 2013-2014, nearly 50 per cent of corporate occupiers, responding to the survey, named India (double the figure from 2012–13 at 24%) as their destination of choice, beating China as a preferred destination (42% in 2013-14, down from 60% in 2012–13).
The major reasons behind such positive sentiments would appear to be rapid population growth and gradually recovering economic prospects, coupled with increasing transparency and improving infrastructure. These factors seem to be removing many of the traditional barriers to entry into Indian markets.
"The opportunities presented by economic growth in India may now be sufficient to overcome some of the longstanding barriers — governance, infrastructure, bureaucracy, and lack of transparency — that have inhibited inward investment," he added.
Magazine noted that the country has already attracted a large number of occupiers from a range of sectors, including financial and business services, media, technology and telecommunications, and pharmaceuticals.
"This has been supported by a general process of de-regulation and a range of specific government initiatives designed to attract foreign investment, such as relaxation of rules on foreign ownership, streamlining of the development process, and promotion of a range of high-tech growth industries," he said in a statement.
Improved international and domestic infrastructure connections have supported growth in a number of cities, including Mumbai’s financial cluster and the economic hub of the NCR.
"Growth in the technology sector has particularly contributed to this phenomenon. With the US economy on a gradual recovery graph, improving prospects could also translate into more back-office opportunities for India," he said.
Stating that India’s commercial office market across leading cities has been headed towards a mature growth curve, Magazine said that various off-shore funds and key institutional players are turning to investments in core commercial assets.
He highlighted that private equity firms, pension funds and real estate investment trusts (REITS) own close to 80 per cent or more of the office space market in most mature markets around the world.
"With the possibility of Indian REITs taking off, and India’s core commercial assets yielding comparatively high rentals among emerging markets, it would seem that India is presently poised to make the best of the opportunity headed its way," Magazine said.