GSK, Google propel Bengaluru to top in office leasing

Aided by pharma major GSK and technology giant Google, Bengaluru led the office space leasing transactions in the country during the second quarter of calendar 2020.

The tech hub accounted for 2 million of the total 4.42 million sq. feet of office space leased during the June quarter — the highest among top five cities in the country — despite the pandemic-induced lockdown impacting transactions during this period.

Among the key transactions signed during the Q2, pharma major GSK took 1,45,000 sq. feet at Bagmane Capital-Luxor on Outer Ring Road. It was followed by Fidelity Investment (70,615 sq. feet) at Embassy Golf Links at Domlur and Google (58,000 sq. feet) at RMZ Infinity on Old Madras Road. First Source leased 52,000 sq. feet space at Brigade Tech Gardens, Whitefield.

During the first two quarters of this year, Google has leased a total of 3,79,000 sq. feet of office space in Bengaluru, according to data provided by property consultant Vestian Global Workplace Services.

However, compared to the second quarter of 2019, Bengaluru saw a 43% decline in absorption.

Cumulatively, the top five cities such as Bengaluru, Mumbai, Chennai, Hyderabad and Kolkata have absorbed 4.42 million sq. feet office space during Q2 2020, depicting a decline of 54% over the absorption observed a year ago in Q2 2019.

Bengaluru was followed by Mumbai in second position with leasing of 1.32 million sq. feet and Hyderabad with 5,50,000 sq. feet space.

"While Q1 2020 saw a cautious office market, with most occupiers uncertain over the course to follow given the singular nature of the event, Q2 2020 observed severe constraints in businesses, leading several companies to take difficult operational decisions," Shrinivas Rao, CEO, APAC, Vestian Global Workplace Services, said.

The pandemic has compelled corporates to review their requirements for office space, deferring their decisions on expansion plans, fresh offtake of commercial spaces. "There have been requests for contract renegotiations as well. These factors have contributed to the fall in demand considerably," Rao said.

The new office space completions for Q2 2020 was recorded at 6.84 million sq. feet in the top five cities, a dip of 41% year-on-year.