Office space leasing rose 5.3% in 2018: CBRE report

By: |
Published: January 22, 2019 12:24:38 AM

CBRE’s head of India, South East Asia, Middle East and Africa, Anshuman Magazine said, “Office leasing activity is expected to remain stable in the short term, backed by corporate looking to expand or consolidate their operations”.

‘Office space leasing rose 5.3% in 2018’

The renting of office space in 2018 was robust with gross leasing activity surpassing 45 million sqft and touching 47.4 million sqft, a 5.3% growth year-on-year, real estate consultancy CBRE said in its latest report.

According to CBRE’s India office market view (Q4 2018) report, by the end of 2018, Bangalore dominated office leasing, followed by NCR, Hyderabad and Mumbai, and the four together accounted for almost 80% of the overall space take-up.

CBRE’s head of India, South East Asia, Middle East and Africa, Anshuman Magazine said, “Office leasing activity is expected to remain stable in the short term, backed by corporate looking to expand or consolidate their operations”.

Similar to last year, CBRE expects that occupiers would put in greater efforts to build in flexibility in their portfolios due to changes in the business environment. Additionally, the filing of India’s first REIT, primarily comprising office assets, is also likely to further improve investor interest in this segment in the coming quarters, he added.

READ ALSO | Where are jobs? Not just India, the world is asking this question; here’s what worries them most

In terms of office space leasing by corporate, tech companies dominated 2018 with overall space take-up rising from about 32% in 2017 to about 34% in 2018. The share of e-commerce firms, which accounted for 5% space in 2017, rose to 6% last year, while leasing by the BFSI sector remained flat at 14% in 2018.

According to CBRE’s report, the office space take-up was dominated by small and medium-sized transactions with mid-sized transactions accounting for about 41% of the total transaction activity, while small-sized transactions having a 44% share.

On outlook, CBRE South Asia managing director (Advisory & Transaction Services), Ram Chandnani said, “Overall, we expect infrastructure initiatives such as completion of highways and introduction of Mass Rapid Transport System (MRTS) services, etc to influence occupier preferences and decision-making in coming quarters. In lieu of the sunset date on SEZ benefits, we also expect the share of leasing in SEZs to rise across cities in 2019”.

The year 2018 also witnessed continuity in the trend of future-proofing portfolios and hedging against future rent escalations by pre-leasing space across various cities.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

FinancialExpress_1x1_Imp_Desktop