South Cities (Bengaluru, Hyderabad and Chennai) Clock in 30 mn sf of Office Gross Absorption in 2019: Colliers International India

/ -- During 2019, Bengaluru, Hyderabad and Chennai saw a 23% rise in demand for office space over last year, with gross absorption at 30.6 million sq feet. This strong growth demand is led by expansionary activity by occupiers in the technology and IT-BPM space, ramped-up by flexible workspace players and investments of companies in global capability centers.

"As per our expectations, a sustained leasing momentum, coupled with continued demand from technology and flexible workspace operators once again helped Bengaluru secure the number 1 position in terms of overall leasing in 2019. Over the last few years, Hyderabad has seen unprecedented growth in commercial leasing activities owing to infrastructural push from the government, strong demand from occupiers and attractive rentals. The city has been a major location for global investors who are scouting for ready stock with high yield rates," says Arpit Mehrotra, Senior Director, Office Services (Bengaluru & Hyderabad) at Colliers International India.

Bengaluru continued to be the market leader with gross absorption of about 15 million sq feet in 2019, an increase of 6% from 2018. Technology and IT-BPM sector accounted for 39% of the total leasing during the year, followed by the engineering and manufacturing segment's share at 16% and the flexible workspace share at 15%. During the year, Bengaluru saw supply infusion of 10.9 million feet.

Gross Absorption (msf)
City
2019
2018
% change
Bengaluru
15
14.1
6%
Hyderabad
9.5
6.9
38%
Chennai
6.1
3.9
56%
Source: Colliers International India