Top quality office space is finding more takers with 9.6 million sq ft having been leased during Q3 FY17, up 41 % year-on-year.
However, seen sequentially, that’s a drop of about 8%. The total space absorbed in 2016 so far is 28.26 million sq ft, according to Colliers International and its companies in the BFSI and manufacturing sectors that appear to set up or expand their operations. In some markets such as Bengaluru, demand at 2.27 million sq ft didn’t quite match that in the June quarter, and was 36% lower. However, industry watchers say the outlook is good given companies have committed to renting space.
Interestingly, start -ups and smaller firms showed an increased preference for serviced and cob-working space. This is in sharp contrast to the prognosis a year back that start-ups were on the lookout for the best prope-rties and was possibly based on Flipkart signing up with Bengaluru-based developer, Embassy in late 2014.
About the same time, Snapdeal had moved into its upscale 0.5 million. sq. ft pad in Gurgaon.
Demand, analysts believe, could outstrip supply in IT-driven markets such as Pune, Bengaluru, and Hyderabad resulting in smaller vacancies and an uptick in rents.
In contrast, rents and vacancies in traditional commercial markets such as Mumbai and NCR are likely to remain stable. Mumbai’s micro-markets remain attractive office destinations and saw a sequential increase of 54% in Q316 in volumes at 1.09 million sq ft; about half of this was concentrated in the western suburbs followed by Bandra Kurla Complex (BKC) at 19% and Navi Mumbai at 16%.