The net office space absorption in the country touched 13.2 million square feet (sq ft) during the second quarter (Q2) of 2019, rising 10 per cent from the corresponding quarter last year.

Bengaluru accounted for the highest share in leasing at 28 per cent during Q2, followed by Hyderabad and Delhi-NCR, which had a share of 24 per cent and 18 per cent respectively.

In Hyderabad, the expansionary mode of technology and flexible workspace operators was well supported by the 3.5 million square feet of supply during the quarter. Occupiers continue to pre-lease space in Hyderabad, as vacancies remain tight in preferred sub-markets in the city. Vacancy in the city is recorded at 5.5 per cent at the end of Q2 2019. In fact, more than 15 new companies entered the Hyderabad market in first half of 2019, from sectors such as tech, flexi spaces and pharma.

According to Colliers Research, technology, BFSI (banking, financial services and insurance) and flexible workspace operators continue their expansionary mode, which was supported by the quality supply infusion in Q2. This rose 67 per cent year-on-year to 10.3 million sq ft.

“Bengaluru maintains the top position in office space leasing, driven by the technology and manufacturing occupiers which had a share of 32 per cent and 18 per cent respectively. While flexible workspace operators’ leasing was subdued during the quarter, operators are ramping up aggressively and this year is likely to see robust leasing by flexible workspace operators in the city. Occupiers are pre-leasing space, and even taking-up space in refurbished grade B buildings, due to tight vacancies amidst healthy demand,” said Ritesh Sachdev, Head, Occupier Services, India and Managing Director, South India at Colliers International.

On a half yearly basis, gross absorption touched 24.5 million sq ft, inching up marginally by two per cent compared to the same period last year.

“The leasing activity has risen by 17 per cent compared to previous quarter indicating positive business sentiment as a result of re-election of the NDA government. During the second quarter, tech and IT-BPM companies continued the strong streak, accounting for 35 per cent share. This was followed by the engineering and manufacturing sector and BFSI sectors with a share of 12 per cent each. During the quarter, flexible workspace accounted for only 11 per cent of the leasing. However, they are expected to ramp up, preleasing space for the future”, explained Megha Maan, Senior Associate Director, Research at Colliers International India.