Office sector leasing across nine cities surged by 33% in Q2 FY24: Report, ET RealEstate

October 5, 2023
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NEW DELHI: The leasing activity across nine cities i.e. Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kochi, Kolkata, Mumbai and Pune increased by 33% year-on-year and touched 15.8 million sq ft during the Jul-Sep 2023 period, according to a recent report by CBRE South Asia, a real estate consulting firm.

The share of Banking, Financial Services and Insurance (BFSI) firms constituted 29% of total leasing in office sector during the quarter. Mumbai, Bangalore and Hyderabad dominated the absorption in Jul-Sep 2023 period, collectively accounting for about 60% of the transaction activity.

The BFSI firms’ leasing share surged from 16% in the Apr-Jun 2023 quarter to 29% during the Jul-Sept 2023, driven by significant deal closures by global capability centres of BFSI corporates, while Indian banks and insurance firms continued to expand their footprint in the country.

In the Jul-Sept 2023 period, the total office space supply across nine cities surged to 19.3 million sq ft, recording a 94% year-on-year increase. Bengaluru, Hyderabad and Pune dominated new completions in Jul-Sep 2023 with a share of 77%. The non-SEZ sector remained at the forefront of development completions in the quarter (Jul-Sep 2023), increasing its share from 75% in the previous quarter (Apr-Jun) to 95%.

Anshuman Magazine, chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “While the office sector in 2023 is likely to perform better than predicted at the beginning of the year, India has demonstrated resilience in the face of global economic challenges and remains one of the most attractive destinations for global corporations establishing their global capability centres (GCCs).”

Small-sized (less than 10,000 sq ft) to medium-sized (10,000 – 50,000 sq ft) transactions drove office space take-up in Jul-Sep 2023 with a share of 86%, which was largely stable on a quarterly basis. The share of large-sized deals (more than 100,000 sq. ft.) saw a slight uptick, from 6% in the previous quarter to 7% in the Jul-Sep 2023.

Bengaluru and Hyderabad took the lead in large-sized deal closures during the quarter, with Chennai and Delhi-NCR following suit. A few other such transactions were also reported in Pune and Mumbai.

Ram Chandnani, managing director, Advisory & Transactions Services, CBRE India, said, “This year, we observe occupiers adopting a multifaceted approach that encompasses optimum strategies. Return-to-office plans are gaining traction, characterized by a concerted effort to craft experiential workplaces that cater to all generations of employees. This year, we anticipate a surge in investments in workplace technology, improved coordination across functions, and a heightened emphasis on transforming workspaces.”

The popularity of flexible office spaces continues to rise, with an increasing number of occupiers indicating their intent to allocate more than 10% of their portfolios to these solutions.

  • Published On Oct 4, 2023 at 02:00 PM IST

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