Office leasing up 33% in July-September quarter to 15.8 mn sq ft: CBRE

Mumbai, Bangalore and Hyderabad dominated the absorption in the September quarter, collectively accounting for about 60% of the total transaction activity

Office leasing in the top nine Indian cities increased by 33 per cent to 15.8 million square feet (msf) in the July-September quarter of this year compared to the same period last year, according to a report by real estate consultancy CBRE South Asia titled "CBRE India Office Figures Q3 2023".

Mumbai, Bangalore and Hyderabad were the primary contributors to the absorption during the September quarter, collectively accounting for approximately 60 per cent of total transaction activity.

According to the report, small-sized (less than 10,000 sf) to medium-sized (10,000 – 50,000 sf) transactions were the main drivers of office space take-up in the quarter, contributing 86 per cent of the share.

 

The proportion of large-sized deals (more than 100,000 sf) saw a marginal increase, moving from 6 per cent in the previous quarter to 7 per cent in the July-September quarter. Bangalore, Hyderabad and Delhi NCR led the way in the closure of large-sized deals during the quarter.

Also Read: Net office leasing rises to 18-month high of 10.37 mn sq ft in Jul-Sep: JLL

In sectoral terms, the share of banking, financial services and insurance (BFSI) firms made up 29 per cent of the total leasing activity in the office sector for the quarter. This was followed by technology companies with a 23 per cent share and engineering and manufacturing companies at 10 per cent.

"American and domestic firms equally led the absorption in the July-September period, each holding a 42 per cent share," the report stated.

In the said quarter, the overall office space supply across the nine cities soared to 19.3 msf, marking a 94 per cent year-on-year increase. Bangalore, Hyderabad and Pune dominated new completions, contributing 77 per cent of the share.

"Bangalore, followed by Delhi NCR, Chennai and Hyderabad, are expected to drive absorption in 2023. Mumbai, Pune and Kolkata are also likely to see steady space take-up during the year. Additionally, global and domestic technology firms and consulting companies are exploring opportunities in selected Tier-II markets, attracted by improved infrastructure, a skilled talent pool, and competitive rental options," said Anshuman Magazine, chairman and CEO for India, South-East Asia, Middle East & Africa at CBRE.

"This year, we expect a surge in investments in workplace technology, better coordination across functions and a heightened emphasis on transforming workspaces," added Ram Chandnani, managing director of advisory and transaction services at CBRE India.