Bengaluru continued to lead office space leasing among top six cities in India, recording absorption of 4.1 million sq.ft. in the first half of 2021 and accounting for approximately 37% of the overall leasing activity in the country, which stood at 10.9 mn sq.ft., said realty advisory firm Savills India.
Bengaluru was followed by Delhi NCR, which witnessed leasing activity of 2.0 mn sq.ft. recording a 37% YOY decline. Mumbai and Hyderabad shared third place with approximately 1.4 mn sq.ft. absorption, but the annual decline in leasing was sharper for Hyderabad at 46% compared to 39% for Mumbai.
Pune recorded approximately 0.9 mn sq.ft. leasing while Chennai saw leasing activity of 1.1mn sq.ft.
In Bengaluru, the micromarket of Outer Ring Road (ORR) accounted for one-third of the city-wide share, followed by the secondary business district and eastern peripheral micromarket – primarily Whitefield and Brookefield, the firm said on Tuesday.
The two micromarkets contributed around 25% of the leasing activity in Bengaluru. In fact, east Bengaluru – Brookefield, Whitefield and the eastern part of ORR – accounted for more than half of the city-wide absorption in the first half of the year.
In the first half of the calendar 2021, large sized deals continued to drive realty in Bengaluru. Deals of 100,000 sq.ft. or more contributed more than 60% of the demand activity.
As usual, the IT sector continued to account for the majority share of the demand for office space in Bengaluru.
Engineering & manufacturing sectors contributed 13% towards the overall leasing activity.
However, the coworking segment’s sectoral share fell from 15% in 2020 to 2% in H1 2021, according to the Savills India study.
During H1, the overall vacancy levels in Bengaluru increased to 11.5%, from 10% in the second half of 2020.
Rentals overall remained stable although premium developments commanded higher rents.
Sarita Hunt, MD, Bengaluru, Savills India, said, Bëngaluru’s dominance as the leading office market in terms of absorption in India has continued well into 2021. In spite of the second wave of COVID-19, the office market continues to be resilient With the second wave now plateauing, the city opening up, occupiers’ demand is expected to increase, and this combined with quality supply coming in, we firmly believe that H2 will look extremely healthy for the office market.”
