Bengaluru, the technology hub, has continued to drive the office space leasing in the country during the first quarter of 2019, accounting for 43% share of the total absorption at 3.95 million sq feet.
The quarter witnessed total leasing of 9.16 million sq feet space during Q1, 2019, a growth of 45.3% over the corresponding quarter last year.
During the January-March quarter of 2019, Bengaluru recorded a growth of 12.85% over the same quarter last year. During the first quarter last year, Bengaluru saw absorption of 3.50 million sq feet office space.
While the growth in office space leasing was largely led by the technology sector, a substantial quantum of absorption was accounted for by co-working operators, that continued to scale up their space requirements, according to a report by Vestian, the international property consultant.
Co-working brands such as WeWork, CoWrks, Indiqube, and TableSpace amounted to approximately 1.18 million sq feet in Bengaluru. Of late, there has been a perceptible trend of co-working operators offering space in older office projects in space constraint CBD office markets, offering startups and other new entrants with the option of being centrally located.
Major large-sized deals recorded during the quarter include Swiggy (310,00 sq feet), WeWork (250,000 sq feet), both on ORR, and Boeing (120,000 sq feet) in Hebbal, and Indiqube (183,000 sq feet) in Madivala among others.
Among the micro markets that witnessed growth, Outer Ring Road (ORR) remained the most preferred office destination in the city and accounted for the highest share of absorption, to the tune of nearly 36% of the total office space absorption during the quarter. Shrinking vacancy levels of the region have led IT/ITeS occupiers to explore pre-commitment options and this is expected to remain the norm in the coming period, till more supply is added, Vestian said.
Besides the ORR, peripheral office markets, primarily towards Bellary Road in the north, and the suburban markets in Koramangala saw substantial leasing transactions.
On the supply front, Bengaluru witnessed the infusion of a significant quantum of new office space amounting to 4.6 million sq feet, the majority of which comprised of project completions deferred from previous periods.
Among other cities, Hyderabad accounted for the absorption of 2.18 million sq feet and Mumbai absorbed 1.83 million sq feet. As far as the supply of new space is concerned, Hyderabad and Mumbai accounted for 2 million sq feet and 1.40 million sq feet respectively.
