Average office rents in Bengaluru, Chennai and Hyderabad maintained 2019 levels despite the volatility experienced in 2020. Rents in Mumbai, Pune and NCR, however, fell by 5.6%, 6% and 4.4% respectively.
NEW DELHI: The office market in top eight cities recorded transactions of 22.2 mn sq ft in the July – December 2020 period, whereas new completions were recorded at 17.2 million sq ft in the same period, according to a recent report by Knight Frank India.
The year began on a high note with office leasing achieving 96% of the quarterly average of 2019 in Q1 2020. However, the government-imposed lockdown to combat the fury of the pandemic, led to temporary economic inactivity and translated into a sharp fall in office leasing activities in Q2 2020. With the return to normality, gross leasing revived to 31% of the quarterly average of 2019 in Q3 2020, eventually surging to a 115% in Q4 2020.
Mapping the performance on a quarter-on-quarter (QoQ) basis, office transactions for the eight cities grew by a massive 271% in Q4 2020 to 17.5 million sq ft as against 4.7 million sq ft in Q3 2020. Pre-commitments contributed 24% of the total transacted volume of 17.5 million sq ft in Q4 2020, signifying that businesses are re-initiating expansion plans in the new normal.
In terms of the share of sectoral occupiers, Information Technology (IT/ITeS) sector dominated with a 41% share in H2 2020, followed by BSFI and Manufacturing sectors with 16% each, while Other Services and Co-working sectors recorded 17% and 10% respectively.
Bengaluru witnessed a surge of 8% year-on-year (year-on-year) to 7.5 million sq ft in H2 2020 in leasing activities.
Top 8 cities: Quarterly split of transactions in million sq ft:
Average office rents in Bengaluru, Chennai and Hyderabad maintained 2019 levels despite the volatility experienced in 2020. Rents in Mumbai, Pune and NCR, however, fell by 5.6%, 6% and 4.4% respectively.
A significant 33% of the area transacted by BFSI sector companies occurred in Hyderabad, while Bengaluru accounted for the highest share of the transactions executed by Information Technology, Manufacturing and Co-working sector companies at 35%, 39% and 45% respectively.
New office completions in 2020 dropped by 42% year-on-year to 35.5 million sq ft. Half-yearly growth numbers for new completions declined by 54% year-on-year to 17.2 million sq ft.
Source: https://realty.economictimes.indiatimes.com/news/commercial/eigth-indian-cities-record-leasing-of-22-2-million-sq-ft-in-h2-2020-report/80132354