Gross office space leasing jumps 2.5 times in Jan-Mar in top 8 cities

Office space leasing jumped nearly 2.5 times to 13 million sq ft in eight major cities during January-March quarter on strong demand from co-working and IT sectors, according to property consultant Cushman & Wakefield (C&W).

The gross office space leasing stood at 5.3 million sq ft in eight major cities during the year-ago period. These cities are - Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad.

"With a strong start across markets in 2019, the leasing activity this year is expected to gain momentum with the already high demand for quality office spaces. Demand activity is expected to heighten, with the pre-commitment activity observed as well as the increase in net absorption levels in key markets this quarter," said Anshul Jain, Country Head and MD, Cushman & Wakefield India.

According to the report, the share of co-working segment rose 20 per cent in the first quarter of 2019 calendar year from about 7 per cent in January-March 2018.

"The ITBPM sector is on a growth trajectory, and flexible workspace is the buzzword in terms of office space demand," C&W said in a statement.

"A robust business ecosystem supports the expansionary activity of occupiers, with pre-commitments made towards quality office space supply especially in cities like Bengaluru, Hyderabad, and Pune where vacancies continue to remain tight and in single digits," it added.

According to the data, Bengaluru witnessed maximum leasing at 5.03 million sq ft during January-March 2019, a jump of over three-fold from 1.56 million sq ft in the year-ago period.

Delhi-NCR's witnessed leasing of 2.79 million sq ft of office space as against 1.53 million sq ft in the corresponding period of the previous year.

Leasing jumped over three-fold in Mumbai and Hyderabad and Kolkata at 1.57 million sq ft, 1.41 million sq ft and 3,58,500 sq ft, respectively.

Chennai saw the maximum rise of over six times at 10,12,662 sq ft from 1,55,064 sq ft in the year-ago period.

However, leasing fell by 19 per cent in Pune at 7,23,156 sq ft and by 10 per cent in Ahmedabad at 86,700 sq ft.

"Co-working operators can look forward to a promising 2019, by profiting from the growing interest of occupiers from across the world and from the inclination towards a mixed portfolio strategy," Jain said.