The gross leasing activity across seven major cities in India saw a peak in 2018 in the last eight years. As per a new report by Colliers India Research, the leasing activity pegged at 50 million sq ft in 2018, which was the highest in the last eight years.
Gross leasing saw a 17 percent Y-O-Y increase as compared to the activity happened in 2017. Here are the main key points of the report:
- The top three sectors contributing to gross leasing were IT-ITeS (43%) of the total, flexible workplaces (14%), and BFSI (12%).
- Despite 2018 witnessing 14 million sq ft of gross absorption, a decline of 9 percent year-on-year, Bengaluru retained its leading position in office leasing among the seven major cities in India, representing 28 percent of pan-India leasing volume.
- It was the fourth quarter of 2018 that saw the most activity. The quarter witnessed notable supply of 2.86 million square feet, a threefold increase from the previous quarter.
- Grade A supply saw a dip in 2018 as compared to last yearThe fourth quarter of 2018 witnessed notable supply of 2.86 million sq feet a threefold increase from the previous quarter.
- NCR saw a peak in leasing volume in the past eight years with overall absorption of the region at 10.1 million sq ft in 2018, a 27.3 percent year-on-year increase.
- Comprehending from future development plans for 2019-2021, Delhi is planned to see 3.9 million sq ft of office supply, increasing the existing office stock by 26.4 percent.
“Peripheral locations in major cities such as Bengaluru, NCR, and Mumbai to gain occupier attention as they offer better quality contiguous space at lower rents,” Money Control quoted Ritesh Sachdev, senior executive director, Occupier Services at Colliers International India, as saying. “Moreover, flexible workplace operators in both central, as well as peripheral business districts, may see increased leasing. However, net take-up of space by occupiers may see lower growth given the growing need for workspace efficiency and cost-effectiveness.”