In a first, Hyderabad overtook Bengaluru to emerge at the top in the total office leasing in the first quarter of 2019. The overall leasing activity touched 12.8 million sq.ft in the same period with four dominant cities including Mumbai and Delhi-NCR accounting for more than 75 per cent of the leasing activity, according to a report by CBRE, a real estate consulting firm.
The report titled ‘India Office MarketView – Q1 2019 report’ mentioned that as in the previous quarters, office space take-up was dominated by small and medium-sized transactions. Medium-sized transactions (ranging between 10,000 sq. ft. and 50,000 sq. ft.) accounted for about 48 per cent of the transaction activity, while small-sized transactions (less than 10,000 sq. ft.) had a 33 per cent share.
While the share of large-sized deals (greater than 100,000 sq. ft.) increased from seven per cent in Q4 2018 to 10 per cent during this quarter. Hyderabad followed by Bangalore, dominated large-sized deal closures in Q1 2019, while a few such deals were also reported in Mumbai, Noida and Chennai.
“Office leasing activity is expected to remain stable in the short term, backed by corporates looking to expand or consolidate their operations. While interest from American corporates is expected to sustain, we anticipate that India’s position as a preferred outsourcing destination would continue to attract corporates from other geographies such as EMEA and APAC,” said Anshuman Magazine, Chairman and Chief Executive Office (CEO), South East Asia, Middle East and Africa, CBRE.
The report added that tech corporates continued to drive office space take-up in the country, with their share in total leasing rising from 22 per cent in Q1 2018 to 33 per cent in Q1 2019.
Meanwhile, the share of key flexible space operators rose from five per cent to 16 per cent during the same time period. Other sectors such as engineering and manufacturing (10 per cent), BFSI (nine per cent) and research, consulting and analytics (seven per cent) also contributed to the leasing activity in Q1 2019.