Office space leasing doubled to 18.7 mn sq ft during Apr-Jun in top eight cities: C&W

The gross leasing of office space doubled to 18.7 million sq ft during April-June quarter of this year across eight major cities driven by demand from corporates and co-working operators, signalling rise in job opportunities, according to property consultant Cushman & Wakefield.

The leasing stood at 9.28 million sq ft in the corresponding period of last year across the said eight cities -- Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad, Pune and Ahmedabad.

"The 2019 office leasing track record continues to be stellar, with 32 million sq ft already leased out across metro cities in H1 2019. That is about 66 per cent of the total leasing activity recorded in 2018," C&W said in its latest report.

While gross leasing in these eight cities stood at 18.7 million sq ft during April-June 2019, the net leasing of office space stood at 14.1 million sq ft.

During April-June 2019, the ITBPM (business process management) sector absorbed about 41 per cent of total leasing volumes, followed by captive centres at 15 per cent and co-working at 10 per cent.

"The Indian office markets continue to put in a strong performance with the momentum of H2 2018 pushing onwards to the strongest ever H1 performance in 2019, with gross leasing activity nearing 32 million sq ft," Cushman & Wakefield India Country Head and MD Anshul Jain said.

Bengaluru maintained its leadership status in leasing activities but Delhi-NCR, Mumbai and Hyderabad too performed well, he added.

"We remain on track to surpass the historic highs in leasing activity seen in 2018 which also bodes well for overall job creation in the white-collar job market," Jain said.

According to the data, office space leasing in Bengaluru rose to 5.52 million sq ft during April-June 2019, from 2.56 million sq ft in the year-ago period.

Mumbai saw sharp jump in leasing at 3.42 million sq ft, from 0.9 million sq ft.

The leasing of office space in Delhi-NCR rose to 3.4 million sq ft from 2.2 million sq ft, while absorption increased to 2.57 million sq ft from 0.48 million sq ft in Hyderabad.

Pune witnessed marginal decline at 2.04 million sq ft, from 2.1 million sq ft, while Chennai reported 1.45 million sq ft of office space leasing against 0.83 million sq ft in the corresponding period of last year.

Leasing of office space in Kolkata rose to 0.22 million sq ft from 0.1 million sq ft, while absorption increased in Ahmedabad to 0.08 million sq ft from 0.03 million sq ft.

Overall vacancy of office space remained flat at around 15 per cent with Bengaluru, Pune and Hyderabad reporting single digit vacancy of 5-6 per cent only, Cushman & Wakefield said.