Net office space leasing drops 1 pc last year on relocation

Net office space absorption fell marginally by 1 per cent last year to 33.5 million sq ft in eight major cities due to increased relocation and consolidation, according to property consultant Cushman and Wakefield (C&W).
Of the total net absorption, Bengaluru contributed the highest at 10.3 million sq ft followed by Pune at 6.3 million sq ft and Hyderabad at 5.5 million sq ft, C&W said in a statement.
However, the total leasing activity breached the 50 million sq ft mark in 2015, up 15 per cent over the previous year, as a large number of companies went into consolidating their operations in larger spaces in a bid to improve productivity.

"The commercial office sector gathered momentum with some large leases and buyout transactions witnessed during the year. Companies have been firming up expansion and consolidation plans, leading to increased leasing activity as they foresee higher potential and increasing business activity," said Sanjay Dutt, India MD, Cushman & Wakefield.
The absorption trend during the year was largely driven by IT-ITeS, e-commerce, consulting and pharmaceutical sectors, he added.
Dutt expected that several new start-ups which are in growth mode would create considerable demand, helping office space absorption to remain strong. "The next two years is expected to see increased occupier demand on the back of improved business activity and economic growth," he said.

Office space supply in these eight cities -- Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad -- rose 9 per cent to 41.2 million sq ft.