Office leasing activity finally gained some pace in Delhi NCR with seven large transactions in the April-June quarter. But there were just two such deals in Mumbai, as a weak leasing climate continues in the financial capital, reports Shubhra Tandon in Mumbai.
Among the big deals, Snapdeal leased nearly 5 lakh sq ft in ASF Centre, Gurgaon for a rent under-stood to be Rs 65 per sq ft per month, while Zomato is said to have leased 1.20 lakh sq ft at One Horizon Centre for Rs 150 per sq.
According to sources, global IT companies NTT Data and Oracle have also leased 1.75 lakh sq ft and 1.25 lakh sq ft, respectively, in Gurgaon and Noida during the period.
Rajat Gupta, head of transactions (north), CBRE India, said the demand from e-commerce companies are mainly for back-end offices, which house functions such as software development, logistics management, etc, and find Gurgaon and Bengaluru favourable. “In these markets, e-commerce players are willing to shell out anywhere between Rs 45 and Rs 50 per sq ft of rental for fitted-out properties. In some cases, they are even signing deals at values between Rs 80 and Rs 100 per sq ft,” he said.
Bengaluru, which has led the pack in large office transactions for over a year, recorded seven large office transactions in April-June, though the number was tad lower than the corresponding quarter of last year. Rohit Kumar, head (research), DTZ India, believes Bengaluru continues to see healthy office space absorptions and expects the second half of the year to see more action.
“Sentiments towards the Indian economy have improved, and we expect upwards of 10 million sq ft of office space take-up each quarter from here on, with Delhi NCR and Bengaluru driving that change. We closed last year with 36-37 million sq ft of office space absorptions in India, and this year it would above 40 million sq ft,” Kumar said.
Among the deals, global energy and petrochemicals major Shell is understood to have closed 6 lakh sq ft space in RMZ Ecoworld in Bengaluru for a rent understood to be Rs 57 per sq ft per month, Indian IT major Infosys is said to have leased 2.80 lakh sq ft in Gold Hill Supreme for Rs 58 per sq ft per month and global IT company Cognizant is also said to have leased 3.5 lakh sq ft space in Manyata Embassy Business Park, among others, sources said.
Rents, however, are expected to remain where they are since some supply is coming in, though they could see a slight uptick in some prime locations. Kumar said that in Gurgaon’s Golf Course and Sohna Road stretches for example, could see rents go up by 10-12% in the coming quarters as there is not much vacancy left and supply is limited. At the same time, Bengaluru and Mumbai may see some pressure on upward movement of rents.
Meanwhile, Mumbai’s office market saw just two large leases signed in the April-June period with 2.35 lakh sq ft getting occupied against 2.80 lakh sq ft in the corresponding quarter last year. With the banking and financial services space not seeing any action, office space continues to go a-begging. The two lease deals signed include Piramal Life Sciences picking up 1 lakh sq ft, space in Light Hall for a rent said to be Rs 90 per sq ft per month, and Sutherland Global Services taking up 1.35 lakh sq ft at around Rs 45 per sq ft per month.
(With inputs from Priyanka Ghosh)