Office leasing has risen more than 10 per cent across India’s top nine cities in the first half of 2018 compared to the year-ago period, real estate consulting firm CBRE stated in a new report. The growth in office leasing activity possibly reflects a certain momentum in the economy. Here are some of the highlights:
1. Leasing crossed 20 million sq. ft. during the first half of 2018. Bangalore, Delhi-NCR, Hyderabad and Mumbai led the leasing activity. About 16 mn sq. ft. of supply was added, a rise of 40 per cent in the first half of 2018. The four cities that dominated leasing also accounted for a majority of the supply at over 80 per cent of the supply addition.
2. A dominant theme appears to be the rise in co-working spaces with even established corporates looking at flexible supply. The share of co-working/business centre operators doubled from 5 per cent to 10 per cent in the six months of 2018. The report said that the share of the tech sector, the biggest demand generator, declined from 33 per cent to 28 per cent in the first six months. E-commerce companies grew their share as well, rising from 2 per cent in the first half of 2017 to 10 per cent in 2018.
Office space leasing rose 10 per cent in first half of 2018: CBRE
3. Going head, CBRE anticipates sectors such as BFSI, engineering & manufacturing, research & consulting and co-working/business centres to account for a larger share in leasing activity. However, there is increasing concern over rising traffic congestion and poor public infrastructure. Infrastructure initiatives such as completion of highways and introduction of Mass Rapid Transport System services would influence occupier preferences. Meanwhile, higher GST rates wouldn’t make much of a difference. “The direct impact of GST on the office sector remains limited, despite an increase in occupier outgo as the GST taxation rate now stands at 18 per cent compared to the previous 15 per cent service tax. Going forward, we expect this tax rate increase to have a negligible impact on leasing momentum,” the report stated.