Anil Urs | Bengaluru | April 10, 2018
Bengaluru continued to lead leasing activity across India in the first quarter (Q1) of the year 2018, registering a quarter on quarter (q-o-q) growth of 50 per cent, said CBRE South Asia.
In its latest India Office MarketView, CBRE said during the review period (Q1), the market also witnessed significant supply addition, a sign of long-term growth of the market and its continued attractiveness to domestic and foreign corporates.
Outer Ring Road (ORR) and the Central Business District dominated leasing activity and was primarily concentrated in non-SEZ developments. As has been the trend, a majority of this absorption was the culmination of pre-commitments.
Leasing activity was primarily driven by BFSI corporates followed by e-commerce, research, consulting and analytics and tech firms. Co-working/business centre operators continued to be active in the city.
During the review period, leasing activity across India’s top eight markets was at an all-time high. Close to 11 million square feet of space take-up was recorded—a 25 per cent increase from Q1 2017. This is a departure from the norm as the Q1 of the year usually witnesses subdued activity because corporates are still finalizing their business strategies. During the January to March period, Bangalore reported the highest demand for office space and accounted for more than the combined share of the markets of Delhi–NCR, Mumbai and Hyderabad.
Ram Chandnani, Managing Director, Advisory & Transaction Services, India, CBRE South Asia said, “Over the past several quarters, pre-commitments by occupiers in under-construction projects have impacted leasing activity across India’s office market. Constrained supply of ready-to-move-in space, coupled with rising rentals, has led to this trend gaining traction in recent months.” “The uptick in leasing activity in the first quarter is largely due to several projects getting completed,” he said.
“Going forward, as corporate continue to evaluate cost-effective options and stagger their expansion plans, pre-commitments in under-construction projects will have a significant impact on office leasing activity across key cities,” he added.