chennai despite a slowdown in the economy the countrys office market remained upbeat with increased investor activity sustained leasing demand from technology companies and growing leasing interest from various occupiers like manufacturing coworking logistics and warehousing says a quarterly report by realty consultant colliers internationalthe commercial real estate market would remain on track with sustained demand from occupiers in the short to medium term the report said about 90 million sq ft is under various stages of construction across the country and is likely to be completed in the next three years the vacancy level could shrink by 23 in micromarkets of cities like pune bengaluru chennai and hyderabad and price of commercial office space may increase by 23 over the next three years the report saidabout 10 million sq ft of office space was leased out across the country in the third quarter taking the gross absorption in the year so far to 289 million sq ft the figures indicate a 1 fall compared to the absorption for the corresponding period last year but by the end of the year the total office space leasing could still cross 40 million sq ft the report saidbengaluru remained the frontrunner in the sector accounting for almost 31 of the overall demand followed by the national capital region ncr at 25 chennai and hyderabad recorded 12 each mumbai 10 pune 8 and kolkata 2 technology occupiers absorbed 39 of the total space and banking financial services and insurance 17 with a 7 share of total leasing volume in the third quarter coworking operators are showing signs of growth coworking space is becoming popular owing to uncertainty among occupiers about their future headcount growthwith about 123 million sq ft gross absorption in the third quarter chennai has reached around 325 million sq ft office leasing so far this year an increase of 7 compared to the absorption in the same period in 2016 indicating a sustained demandsustained demand from it and ites occupiers is likely to continue in the medium to long term with significant sez supply scheduled in next three years said shaju thomas director office services colliers international indiadespite the continuous upward pressure on rents and low vacancy the stretch of omr before the toll road begins pretoll remains the preferred spot among occupiers with 51 share of the total absorption in chennai the trend could change in the coming months as costconscious companies could look beyond perungudi posttoll the report saidchennai is likely to see about 115 million sq ft of new office supply by end2020 with about 80 concentrated in southern micromarkets like omr pretoll omr posttoll and gst road followed by 16 on mountpoonamallee road