Office space absorption across six major cities stood at 27.4 million sq.ft. in 2020, a drop of 51% as compared to the previous year’s absorption of 55.7 million sq.ft., said international property consultancy firm Savills India.
Large deals of over 100,000 sq.ft accounted for 57% of these leases this year.
The year saw Bengaluru recording the maximum office absorption with 6.8 million sq.ft. space take-up. Despite a drop of 56% as compared to last year, the city led the overall leasing across the country, said the realty advisory.
In 2020, Hyderabad registered the leasing of 5.4 million sq.ft. while NCR reported absorption of 4.4 million sq.ft. Bengaluru, Hyderabad, and NCR constituted around 61% of the total leasing activity this year. Mumbai recorded 2.9 million sq.ft while Chennai witnessed a decline of 29%.
“The story of the Indian office market in 2020 may not be as glorious as it was in 2019 and 2018, it still continues to strive and display resilience, in the face of COVID-induced slowdown. The fundamentals of the Indian economy remain intact and we continue to witness strong leasing traction in sectors like warehousing,”Anurag Mathur, CEO, Savills India said.
In terms of sectoral take-up, IT continues to remain the major occupier of the office market constituting 51.7% of total leasing in 2020 as compared to 46.3% in 2019. Similarly, Banking, Financial Services and Insurance (BFSI) occupiers’ share in 2020 was higher at 14.3% compared to 10.6% in 2019.
Engineering and manufacturing, as well as transport and logistics, two of India’s growing sectors accounted for 7.8% and 3% respectively, which was more than double their respective shares in 2019. However, the co-working segment’s share declined to 8.5% in 2020 from 14% in 2019 as a result of occupiers widely adopting work from home policy, as per the consulting firm.
