Office space leasing touched 62 million sqft in 2019: CBRE

BENGALURU: Gross leasing activity for commercial office space grew more than 25% year over year to touch a record 61.6 million sqft last year, data by independent property consultancy CBRE showed. Bengaluru, followed by Hyderabad, Delhi NCR and Mumbai, dominated office leasing on an annual basis, together accounting for almost 75% of the overall space take-up.
Tech sector continued to rule the roost, with its contribution in the overall leasing going up to 40% from 33% in 2018, This growth was primarily driven by global multinationals, which accounted for more than 70% of the overall space take-up by tech firms this year.
The share of research, consulting & analytics firms has increased to 5% in 2019 from 4% in 2018. The collective share of sectors such as engineering & manufacturing, BFSI, e-commerce and research, consulting & analytics, dropped from almost 36% in 2018 to 31% in 2019.
Several of these corporates continued to show interest in SEZ spaces despite the upcoming sunset clause deadline; as a result, SEZs accounted for about one-third of the leasing activity in 2019.
"Demand was driven by global multinationals, domestic firms and a healthy supply infusion in cities such as Hyderabad and Bangalore," Anshuman Magazine, chairman & CEO of CBRE for India, South East Asia, Middle East & Africa said.
A similar report by Knight Frank last week said Bengaluru led the way yet again in lease of Grade A office space, leasing 15 million sqft, while Hyderabad jumped to the second spot with 13 million. Leasing of Grade A office space in both the cities was boosted by the availability of fresh stock.
In 2019, more than 20 million sqft of pre-leasing activity was recorded mainly in Bengaluru, Hyderabad, Pune and Mumbai. More than 52 million sqft of new office supply added in 2019; led by Hyderabad, followed by Delhi NCR, Bengaluru and Pune. Co-working spaces also gained traction, contributing 14%, or 9 million to the leasing, up from 12% in 2018.
“Several occupiers are likely to adopt newer workplace strategies to realign their portfolios by trying to find the right mix of agility within their core workplaces along with adding external flexible options," Ram Chandnani, managing director, advisory & transaction Services for India, said.