Hyderabad third fastest growing market for office space this year

Ahmedabad led with more than 200% growth in office market at 1.14 million sqft

With an 84 per cent growth in net office space absorption for the Jan-Sept period this year, Hyderabad has joined the fastest growing markets in the country in office leasing, according to a report from global real estate consultant Cushman and Wakefield.

Ahmedabad led with more than 200 per cent growth in office market at 1.14 million sft (356,590 sft last year), followed by Bengaluru, which showed 92 per cent growth at 6.19 million sft (3.22 million sft), and Hyderabad at at 3.87 million sft (2.1 million sft).

On the other hand, Pune and Kolkata saw a decline of 26 per cent and 19 per cent y-o-y in total net absorption respectively at 2.21 million sft and 625,576 sft.

The outperformance of Hyderabad market was essentially due to the substantial increase in pre-committed absorption during this period, while the average deal size here till date increased 28 per cent at 18,400 sft, Cushman mentioned in the report.

“The supply majorly constituted the deferred supply previous years.” Average rentals increased 2.4 per cent compared with the same period last year due to rise in available space quoting higher rentals.

Sanjay Dutt, executive managing director, South Asia, Cushman & Wakefield, said, “The office markets have seen a positive trend as the economic growth improved from all-time lows and business confidence strengthened. Companies have started to expand their operations and new leases and expansion now constitute 75 per cent of the leasing activity in the country with relocations and consolidations witnessing a decline over last year. We will continue to see this positive momentum in the next 2-3 years with net absorption likely to outstrip new supply from 2016.”

Across the country, the report stated total net absorption of office space went up from 17.7 million sft in Jan-Sept 2013 to 24 million sft for the same period this year, a rise of 36 per cent.

Bengaluru and Delhi-NCR constituted approximately 45 per cent of the total net absorption in the current calendar year.