Net leasing of office space down 6.5% in Apr-Jun across 7 cities: JLL India

Net leasing of office space across seven major cities fell 6.5 per cent to 7.95 million square feet during the April-June period, mainly on lower demand in Bengaluru amid global economic uncertainties, according to JLL India.

Net leasing of office space stood at 8.5 million square feet in the year-ago period (April-June 2022), real estate consultant JLL India had said in July last year.

Net absorption/leasing is calculated as the new floor space occupied less floor space vacated. Floor space that is pre-committed is not considered to be absorbed until it is physically occupied.

As per the data, the net leasing of office space in Bengaluru declined 55 per cent to 1.87 million square feet in April-June from 4.12 million square feet a year ago.

Mumbai saw a dip of 26 per cent to 0.98 million square feet from 1.33 million square feet.

In Chennai, the net leasing jumped to 1.76 million square feet from 0.53 million square feet.

Net absorption of office space grew marginally in Delhi-NCR to 1.36 million square feet from 1.32 million square feet.

Hyderabad saw a slight increase in net office leasing to 0.88 million square feet from 0.75 million square feet.

Net office leasing in Kolkata rose to 0.33 million square feet from 0.19 million square feet.

In Pune, the net leasing of office space jumped to 0.76 million square feet in April-June this year from 0.27 million square feet in the corresponding period of the previous year, the data showed.

Rahul Arora, Head - Office Leasing Advisory, India, JLL, said, "The country's abundant and diverse talent pool, cost competitiveness, high-quality real estate, and a successful track record as a leading tech ecosystem have all converged to minimise the impact on India's office markets."

Samantak Das, Chief Economist and Head of Research at JLL India, said the net absorption in the first half of 2023 was slightly lower compared to the same period in 2022.

But looking ahead, he said, "we anticipate stronger market activity in the second half of 2023, which will contribute to achieving a net absorption level of approximately 36-39 million square feet for the full year."

Commenting on the report, Mukul Sharma - Head Corporate leasing, Advance India Projects Ltd (AIPL), said the demand in Delhi-NCR, especially Gurugram, for Grade-A office remains strong.