Office space leasing activity declines during April-June

While the retail leasing activity in the country registers remarkable progress, the office space leasing activity across seven major cities of the country nosedived during April-June period. During the period, leasing activity dropped to reach 13.9 million sft-mark as compared to total leasing activity of 14.8 million sft registered during the corresponding period last year, registering 6% slump in the activity.

The cities of Hyderabad, Bengaluru and Chennai put together occupied 59% (8.2 million sft) of the total leasing activity, according to the renowned Real Estate Consultant Westian in its latest report. It attributed the current situation to prevailing global situation wherein major players and MNCs delaying taking decisions on leasing of the office space. In fact, the demand for office space during the quarter increased by 17%, but the quantum of leasing activities registered a significant decrease.

The technology sector is ahead of all other sectors in leasing activity. There is a good demand for the office space from engineering and manufacturing sectors. If the global markets stabilise, the Indian real estate activity will improve within six months, the report felt. The office space lease market shrunk during the quarter to 2.3 million sft as against 2.4 million sft registered during the corresponding period last year. The reduction is measured at 4%.

The market in Chennai grew by 83% to 2.2 million sft. The Bengaluru market registered 12% fall to settle at 3.7 million sft, while the Mumbai market registered 25% slump to reach 1.8 million sft. The city of Pune registered 6% growth to reach 1.8 million sft. The reduction in Delhi market is put at 5% to cross 2 million sft. Kolkata registered 88% slum in the leasing activity to touch 0.1 million sft mark. However, the share of technology sector in the office space leasing activity is put at 26%, while that of Engineering and Manufacturing sectors is put at 19%. The share of the flexible office space sector is 18%. During January-June period, the office space leasing in seven main cities across the country is put at 25.8 million sft with Bengaluru, Hyderabad and Chennai markets contributing 14.6 million sft shares to it.