Office space leasing hits record 31.8 mn sq ft in H1; attracts USD 1.5 bn capital: CBRE
Strong demand for office space and sustained rental growth continues to attract both institutional investors and developers.
Leasing activity could surpass its previous peak of 2018 across nine cities, according to CBRE’s half-yearly India office market review. Bangalore, Hyderabad, National Capital Region and Mumbai accounted for about 80% of leasing in the first half, according to the report.
Small and medium-sized transactions (less than 50,000 sq. ft.) dominated the office space take-up. Small-sized transactions (under 10,000 sq. ft.) accounted for about 31%, while mediumsized transactions (10,000-50,000 sq ft) had a 47% share, as per the report. The share of largesized deals (more than 100,000 sq. ft.) rose to 12% from 11% previously.
Bengaluru, followed by Hyderabad, dominated large-sized deal closures, while a few large deals were also reported in NCR, Mumbai, Chennai, Pune and Ahmedabad. The technology sector led the leasing activity, accounting for 43% of the total in the first half, against 25% in the corresponding period of 2018, according to the report.
“Increasingly, a larger number of global and domestic firms are positioning India as the destination for higher skilled requirements, either for their global operations (through global inhouse centres) or for techdriven services, rather than low-end processes,” said Anshuman Magazine, CEO, South East Asia, Middle East and Africa – CBRE. “As a result, we anticipate that the share of tech corporates in overall office space take-up would remain strong in 2019, a trend already visible in the first half of the year.” Leasing touched 17 million sq ft during the second quarter, up about 14% on a quarterly basis. Bangalore, Hyderabad and NCR accounted for almost 70% of leasing during the quarter, CBRE said.