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Mumbai, Delhi show opposite trends in office leasing: Colliers

Mumbai saw an absorption of 6.57 m sq ft in 2015 against 3.12 m sq ft, while Delhi's absorption dipped to 0.89 m sq ft against 1.18 m sq ft in 2014

BS Reporter  |  Mumbai 

Mumbai, Delhi show reverse trends in office leasing: Study

Mumbai and New Delhi, two of India’s largest office markets, have shown an opposite trend in in 2015. While of Mumbai offices doubled last year, Delhi has seen a 25-per cent decline on a yearly basis in leasing, according to a new study. Mumbai saw an absorption of 6.57 million sq ft in 2015 compared to 3.12 million sq ft in 2014.

Sector-wise, banking, financial services and insurance commanded the absorption with a 34 per cent share, followed by information technology (28 per cent) and pharma at 15 per cent.

Suburbs such as Andheri (E), Malad, Goregaon (E) and Jogeshwari (E) outperformed with 32 per cent of the total absorption, followed by Bandra-Kurla-Complex (22 per cent), Navi Mumbai (16 per cent), central suburbs and central Mumbai (12 per cent each), Thane (five per cent) and central business district (CBD) (two per cent), said consultancy firm International.

“The office market of Mumbai has started showing strong fundamentals, which is evident from the revived occupier demand. With the new state government in place and positive vibes from the Centre in terms of favourable policies for the city’s and major infrastructure projects, the city is likely to augur well in 2016," said.

Delhi witnessed 0.89 million sq ft of office absorption during the year, which was about 25 per cent less than the 2014 absorption of 1.18 million sq ft. CBD with 34 per cent share in the total absorption remained the most preferred location among occupiers. Newly developed office micro market Aerocity also grabbed a 26 per cent share in this demand, while Saket and Jasola shared only 12 per cent and eight per cent, respectively. This year, the average deal size has gone down to 9,500 sq ft compared to last year’s 16,500 sq ft, which might be the primary reason for fall in absorption.

Sector-wise, BFSI, with a 32 per cent share in absorption, holds the top position in Delhi, followed by information technology (30 per cent), manufacturing (12 per cent), and pharma (10 per cent).

“We expect an increase in absorption in 2016, especially from BFSI, IT/ITeS, media & entertainment, and government sector. Micro markets like Connaught Place, Aero City, Saket and Okhla will continue to see maximum traction," Colliers said.

It added 2015 was the best year for Gurgaon office market in the past five years. The city recorded 5.59 million sq ft of office leasing, which was 18 per cent more than the last year’s absorption of 4.73 million sq ft.

First Published: Wed, January 13 2016. 00:40 IST