Though Bengaluru witnessed the highest net absorption of office space in the country at 8.69 million sq ft, it saw a decline of 30 per cent year-on-year in 2017.
“The decline is mainly due to a slowdown or low supply. However, the city remained the largest office market in terms of volumes,” Anshul Jain, Country Head and Managing Director, Cushman & Wakefield India, told BusinessLine .
Chennai recorded the highest growth in net leasing at 2.78 million sq ft (38 per cent higher). Pune saw 3.85 million sq ft absorbed, an 18 per cent y-o-y increase in net leasing. Kolkata witnessed the highest growth in incremental supply of 180 per cent at 839,000 sq ft.
“The office leasing trends have been positive in the second half as global and national uncertainties settled,” said Jain. By the second half, it was clear that the impact of events such as Brexit, US Fed rates revisions and GST implementation had diminished, he added.
“The impact of RERA (Real Estate Regulation and Development Act, 2016) is minimum on commercial real estate. Even while the GDP growth showed a drop in the mid quarters, the outlook for GDP growth is positive, giving a further boost to corporates to carry on with their growth plans.”
Talking about large office space leasing deals, he said: “The country saw 50 large deals that were over 1 lakh sq ft in 2017. The trend of large deals has been picking up steam as many companies are in rapid expansion mode.”
In large deals, Hyderabad emerged at the top, with over 10 such deals concluded in 2017. One of the deals was for over 1.4 million sq ft, leased by a global consulting major. The city on the whole recorded a moderate decline of 3 per cent in net absorption in 2017. “The city has been attracting large-scale transactions on the back of attractive policies, stable rental values and high availability of talent, pushing companies to expand in the city,” Jain said.
“The stability in political condition has been a strong element of attraction (in Hyderabad), especially when compared to its peers Bengaluru and Chennai.”