Total gross leasing activity in India touched almost 11 million sqft during the first quarter of 2019, driven by continued expansion of tech and IT companies and rapid expansionary mode of flexible workspaces, the report said. According to a survey conducted by global property consultant Collier International, occupiers continued to expand across cities led by a robust business ecosystem, undeterred by the upcoming general elections. The IT-BPM sector accounted for the largest share at 38 percent, while flexible workspaces has contributed close to 30 percent of office leasing, it said.
The leasing activity, although robust, declined by 10 percent from the corresponding quarter last year due to delay in quality supply in top markets such as Bengaluru, Hyderabad, Pune, among others, it said. Bengaluru accounted for the highest share in leasing at 31 percent followed by Mumbai and Chennai, which had a share of 19 percent and 14 percent, respectively. The southern cities continued to outperform, with leasing in Hyderabad doubling, the report said. “Companies are still in the expansion mode led by a robust business support ecosystem,” Colliers International India senior executive director, Occupier Services Ritesh Sachdev said. “The demand for space was not only from foreign players, but also home-grown operators who are rushing to capture a pie of this space.
The absorption by flexi-operators will pick up pace in the wake of developers jumping onto the bandwagon,” Sachdev said. New supply during the quarter, however, declined by 17 percent to 7.7 million sqft with about 58 percent out of the total or 3 million sqft was seen in Bengaluru market. “The year has started on a positive note and we expect leasing to remain healthy for the rest of the year. We see demand from IT occupiers in the form of captive centres to continue to remain strong, along with take-up by flexible workplace operators," he added.