'Office leasing hits all-time high at 43 m sq ft in 2016'

The country’s office market witnessed an all-time high with annual absorption of over 43 million sq feet in 2016, registering a growth of 9% on a year-on-year basis.

Supply addition during the year touched 35 million sq feet with India’s office stock reaching a milestone of over 0.5 billion sq feet (as of Q4 2016) — higher than several East Asian economies, acccording to CBRE India, one of the leading real estate consulting firms in the country.

In its latest India Office MarketView Report – Q4 2016, CBRE India said that Bengaluru and NCR dominate leasing on an annual basis with 47% share. However, both cities individually saw a marginal drop in leasing activity during the last year.

Mumbai and Bengaluru accounted for almost half of the annual supply addition. IT/ITeS firms continue to lead office transaction activity; account for about 50% of the transaction activity during the last quarter, the report added.

The report noted that Bengaluru witnessed a rise in quarterly demand, mainly in Outer Ring Road (ORR), Sarjapur, Peripheral Business District (PBD) of Whitefield and North Bangalore District (NBD)  due to concentration of the supply completion.

CBRE tracks the primary office markets of seven cities -- Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad and Pune.

“The commercial real estate market in India has been performing well for the past two years. This is evident in the record absorption levels witnessed in 2016. India continues to show positive movement, despite global uncertainties,” said Anshuman Magazine, Chairman — India and South East Asia, CBRE. Hyderabad witnessed a steep rise in occupier demand, with absorption more than doubling to cross 6 million sq feet during 2016. The share of domestic corporates in transaction activity grew from 41% in 2015 to 43% last year.