Office leasing activity across India’s top nine markets rose more than 10%, with total leasing of over 20 million sq ft during the first half of 2018, reports Economic Times.
Bangalore along with Delhi-NCR, Hyderabad and Mumbai led the leasing activity with 80% share, showed data from CBRE South Asia.
Continuing the trend, office space take-up was dominated by small- and medium-sized transactions.
Small-sized transactions with less than 10,000 sq ft space accounted for around 44% of the transaction activity, while mid-sized transactions ranging between 10,000 sq ft and 50,000 sq ft held a 42% share.
The share of large-sized deals with over 100,000 sq ft also rose marginally from 4% in the previous quarter to about 5%.
“Corporates are likely to remain cost-sensitive, develop workplace strategies for efficient space utilization, which will impact the office space absorption,” said Anshuman Magazine, Chairman, India and South East Asia, CBRE.
“We foresee pre-commitments in quality, cost-effective projects nearing completion which will have a significant impact on office leasing activity across key cities,” he said.
Occupiers continued to future-proof their portfolios and hedge against future rental escalations by pre-leasing space across various cities.
Pre-leasing activity rose significantly in the second quarter largely in Delhi-NCR, Hyderabad and Pune driven primarily by Banking, Financial Services and Insurance (BFSI), research, consulting and analytics.
Around 17 million sq ft office space supply was added during the period and this was increase of over 50% compared with the first half of 2017.
Four cities including Bangalore, Mumbai, Hyderabad and Delhi-NCR accounted for more than 80% of this supply addition, followed by Chennai.
Sustained occupiers’ interest resulted in rental values rising in the range of 1%-7% across micro-markets in Bangalore, Chennai and Pune.