Chennai: With sustained interest from occupiers led by technology sector, commercial leasing activity across India has crossed 32 million sq ft, up seven per cent from a year ago, across India’s top eight property markets in the first three quarters of 2018.
Office space absorption during the September quarter rose three per cent from a year ago and 12 per cent sequentially to 10.9 million sq ft with Mumbai, Bengaluru, Hyderabad and NCR accounting for almost 80 per cent of the leasing activity, said showed data from property consultant CBRE South Asia.
Occupiers from technology sector, with a share of 48 per cent of total leasing, drove office space take-up in the country during the third quarter. Occupiers from engineering and manufacturing sector with 14 per cent share were followed by co-working and business center operators that absorbed 11 per cent of the total leased space.
Interestingly, India had witnessed 42 million sq ft office space absorption in 2017, while first nine months of 2017 had seen absorption of 30.1 million sq ft.
Even as several mid-to-large-sized deals were reported in Bangalore, Hyderabad, Pune and Gurgaon, more than 30 per cent of the transaction activity was reported in special economic zones (SEZ).
Similar to the previous quarters, office space take-up was dominated by small- and medium-sized transactions. Mid-sized transactions ranging between 10,000 sq ft and 50,000 sq ft accounted for around 45 per cent of the transaction activity, while small-sized transactions less than 10,000 sq ft had a 42 per cent share.
The share of large-sized deals with over one lakh sq ft size increased to seven per cent during the quarter.
The agile workspace sector continued to witness a strong growth momentum, with global and Indian majors expanding their footprint in tier one and tier two cities. Co-working and business operators leased about 3.3 million sq ft space in the first three quarters of the year, almost doubling their take-up reported in the first three quarters of 2017. Other sectors such as Banking, Financial Services and Insurance (BFSI) with seven per cent share also contributed to the increase in leasing activity.
“India’s economic growth continued on its upward trajectory and real estate services along with financial and professional services sector contributed to this economic surge as it grew from five per cent in the previous quarter to 6.5 per cent during the review period. Sectors such as BFSI, engineering and manufacturing, and agile/ co-working/business centers are likely to account for a larger share in leasing activity going forward,” said chairman, India and South East Asia, CBRE, Anshuman Magazine.