Office space leasing by e-commerce firms have dropped by 78 per cent during the first six months of this year with the sector facing challenge to sustain pace of growth and investment.
According to Knight Frank report, office space absorption by e-commerce players fell to 0.9 million sq ft in top six cities – NCR, Mumbai, Pune, Bengaluru, Chennai and Hyderabad – during January-June, from 4.2 million sq ft in the corresponding period last year.
Overall, office space leasing rose by 12 per cent to 20 million sq ft in the first half of 2016 calendar year, from 17.9 million sq ft in the year-ago period.
E-commerce sector contribution to total absorption fell to 4.5 per cent from 23 per cent during the period under review.
“E-commerce segment had a share of about 30 per cent in the overall office space absorption during 2015. But their share has dropped significantly in the first half of 2016,” Knight Frank India National Director (Occupier Solutions Group) Viral Desai told reporters here.
Asked about the reason, he said: “The pace at which the e-commerce players were growing is now challenged.”
Desai said there have been cases where e-commerce players have returned the committed office space to developers.
“The growth of funding in the e-commerce segment has rationalised to a large extent compared to the first half of 2015,” company’s Chief Economist & National Director – Research, Samantak Das said.
In Delhi-NCR, office space leasing fell to 3.5 million sq ft in the first half of 2016, compared to 3.7 million sq ft in the year-ago period due to lack of quality supply.