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Office Space Leasing Activity In India Touched Record High In 2019; IT Sector, Co-Working Spaces Drive Growth
Representative image of a startup office. (Hemant Mishra/Mint via Getty Images)
Buoyed by high demand for office spaces, leasing activity in India touched a record high in 2019 with a gross leasing volume of 69.4 million square feet - a rise of 40 per cent from the last year’s figure of 49.5 million square feet, Economic Times has reported.
These figures have surpassed industry expectations and has renewed optimism for 2020.
Pre-leasing activity too rose to record levels in 2019 and vacancy levels stayed low as a result. The pre-leasing activity stood at 17.2 million square feet, up by 7.2 per cent. Hyderabad led the line for the same with a demand of 5.8 million square feet, followed by Bengaluru at 4.7 million square feet.
Rentals too increased as a result of strong demand, a large chunk of which was propelled by rise in co-working spaces. The co-working space demand increased 1.43 times as compared to last year.
IT industry was very active in leasing office spaces and rapidly expanded its real estate footprint, thus becoming the largest contributor for surging demand. Information technology and Business Process Management (IT-BPM) sector clocked a share of 32.6 per cent followed by captive and global capability centres with a 19.8 per cent share.
The absorption figures (total spaces leased divided by total available spaces) for 2019 exceeded the cumulative figure for 2018 and 2017. The net absorption figure for 2019 stood at 45 million square feet as compared to 2018 figure of 29 million square feet.
The year was also favourable for flexible work spaces, which saw a leasing activity of 7 million square feet.
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