Indian office property market clocked the highest half-yearly leasing transaction volume in six years with 21 million sq ft of space leased across seven major cities in the country in the first half of 2018.
The segment showed a robust growth at 13% on-year, said a report by Knight Frank India.
This was mainly led by increasing leasing by other services sector including consulting firms.
Co-working service providers account for 13% of total transacted space, an emerging trend, while the share of Information Technology/IT-enabled services declined on over all leasing.
“The office sector has been doing very well with the vacancy levels at near zero level in many cases and the rentals steadily moving upwards,” said Shishir Baijal, Chairman & Managing Director, Knight Frank India.
“This includes the most sought-after locations in Mumbai though at 21% the overall vacancy rate may sound high,” he said.
Bengaluru continued to lead leasing activity across India in the first half of year 2018, with Pune experiencing maximum growth in transactions at 118% during the same period.
Bengaluru witnessed growth at 17% year-on-year, while greater share of relatively lower priced business districts leads to reduced rentals for Mumbai.
New completions of office space remain subdued, down 10% on-year during January to June quarter of 2018. “New completions continue to be inadequate in the face of robust transactions, keeping vacancy levels low,” the report said.
Bengaluru leads southern region with lowest vacancy, it said.