Comments
The emergence of smaller cities for corporate expansion has contributed close to 8 million square feet office space absorption in the first quarter of 2017, an increase of 8 per cent over Q1 of 2016.
“This looks like we have begun the year on a strong note, with key markets recording significant office space demand,” said Anshuman Magazine, Chairman-India and South East Asia, of real estate services firm CBRE.
“Delhi NCR absorbed 19 per cent of the total transacted space, followed by Mumbai (18 per cent) and Bengaluru (18 per cent),” he added.
The 8 per cent increase has surprised the real estate sector, and has come despite global uncertainties, riding on various policy initiatives such as the RERA, GST, Infrastructure Status for Affordable Housing, along with a robust infrastructure development roadmap.
“This makes the country an attractive destination for corporates looking to start up or expand operations in India,” said Magazine.
According to CBRE South Asia’s India Office MarketView Report for Q1 2017, IT/ITeS continued to lead in the office real estate leasing market, followed by engineering, manufacturing and BFSI. Transaction activity continued to be driven by IT/ITeS corporates, garnering a share of close to 37 per cent of the overall space leased during the quarter.
However, the share of other sectors such as engineering and manufacturing, as well as the BFSI segments, rose marginally, accounting for 39 per cent in the overall space leased during the quarter. Leasing activity was mainly led by small- to mid-sized deals (less than 50,000 square feet) accounting for almost 90 per cent of all transactions in Q1 2017. Ram Chandnani, Managing Director – Advisory and Transaction Services, CBRE South Asia, said: “The first quarter has set the tone for the office segment across key cities. We expect commercial activity and occupier demand to remain steady in the coming months.”
During Q1, 3.1 million square feet of new supply entered the key markets.
Most of this supply is concentrated in peripheral locations of leading cities, which are likely to attract enhanced enquiries and strong pre-commitment activity .
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.