Bengaluru registers highest volume of office space transaction in Jan-Sept 2017

Even though Office space leasing in eight major cities came down by 7% to 18.26 million sq ft in January-September this year, Bengaluru continued to register the highest volume of transaction.

According to property consultant Cushman and Wakefield report on Monday states that even though there is the slide the demand, the office space absorption likely to touch 32 million sq ft in 2017.

"Bengaluru continued to register the highest volume of transaction, with nearly 5 million sq ft of net absorption, while Hyderabad logged second highest at 3.2 million sq ft, although both registered a decline from the same time last year," states the report.

The consultant stated that the net absorption of office space stood at 19.63 million square feet during the same period. Cushman and Wakefield India MD Anshul Jain predicted that office leasing will remain stable at 32 million sq ft in 2017 on strong demand for commercial space during the fourth quarter.

"We have entered the second half of 2017 with a positive outlook and seen occupiers absorbing and pre-committing greater volumes of office spaces," he said.

He said the third quarter contributed almost 30% to the total net office space leasing achieved in January- September and the trend is likely to continue in the fourth quarter of 2017.

"Going by the previous years' trends, another 30% to 35% is expected to be recorded in the last quarter of the year. Hence, we expect to see close to 12-14 million sq ft on additional net absorption in fourth quarter 2017. This means that 2017 remains on track to record net absorption similar to last year at around 30 million to 32 million sq ft," Jain added.

According to the findings, new inquiries for fresh space for growth and new offices have picked up in the third quarter. This is unlike the previous quarter's trend where the focus on many large occupiers was on relocation and consolidation.

While Ahmedabad saw a maximum fall at 37% with only 3,48,000 sq ft space, the office space leasing declined 17% in Bengaluru to 4.85 million sq ft. Kolkata saw a drop of 15% at 5,52,000 sq ft during the period under review.

Hyderabad's net office space leasing shrank 13% at 3.29 million sq ft during the first three-quarters of this calendar year. In Pune also down by 6% at 2.32 million sq ft. The Delhi NCR and Mumbai witnessed a modest fall of 3% at 2.99 million sq ft and of 1% to 2.08 million sq ft respectively.

Chennai recorded an increase in leasing transaction by 60% to 1.82 million sq ft during January-September, according to the data.