Bengaluru's office leasing soars 15-fold in Q4: Cushman & Wakefield

Bengaluru experienced a 15-fold surge in net office leasing during the last quarter, attributed to substantial leasing transactions by corporate entities and the influence of a low base effect, according to Cushman & Wakefield. The real estate consultancy revealed that office space leasing across eight major cities totalled 18.63 million sq ft from October to December, contrasting with 9.06 million sq ft during the same period the previous year.

Bengaluru's office market achieved the highest volume and the most significant percentage increase in the current quarter. Net office leasing in Bengaluru skyrocketed from 5,18,622 sq ft in the year-ago period to 80,50,266 sq ft during October-December. Cushman & Wakefield explained that several large deals, which were under negotiation in previous quarters but delayed due to cautious approaches, materialised in Q4, resulting in a substantial surge in office space demand.

The consultancy highlighted that the low base effect in the last quarter of 2022, influenced by global occupiers exercising higher caution due to concerns about a potential US recession and rising inflation, contributed to the negative impact on market sentiment.

Leasing trend across cities?

Leasing in Mumbai decreased by 9 per cent, amounting to 22,46,920 sq ft from 24,72,259 sq ft. Delhi-NCR witnessed a 37 per cent decline to 16,25,514 sq ft from 25,61,752 sq ft. Meanwhile, Chennai experienced a 37 per cent increase in leasing to 14,48,595 sq ft from 10,59,307 sq ft, and Pune saw a notable 58 per cent growth to 1,898,143 sq ft from 11,97,733 sq ft. Hyderabad's leasing activities surged more than threefold to 26,18,424 sq ft from 7,88,624 sq ft. Kolkata recorded a nearly 2 per cent growth to 257,700 sq ft from 253,737 sq ft, and Ahmedabad saw a doubling of net leasing to 4,92,795 sq ft from 2,10,010 sq ft in the year-ago period.

Anshul Jain, Managing Director, Cushman & Wakefield, expressed confidence in the fundamentals of the country's office market. He highlighted that the performance in Q4 and throughout 2023 surpassed even optimistic projections, attributing the positive trend to a turnaround in India's economic growth outlook and global economic resilience.

Flexible space operators in Bengaluru, such as Urban Vault and BHIVE, have observed a notable increase in the demand for managed office space. Amal Mishra, Co-founder of Urban Vault, emphasised the recovery of the office market, attributing it to the resurgence of flexible workspaces, especially in cities like Bengaluru, Hyderabad, Mumbai, and Gurugram. Shesh Paplikar, Founder & CEO of BHIVE Group, pointed out that there are varying growth percentages within the flexible leasing industry. He highlighted that the managed working segment has experienced the highest demand in the post-pandemic scenario, followed by coworking. In essence, there is a significant uptick in interest and utilisation of managed office spaces, driven by changing dynamics in the way people work, and the adaptability offered by flexible workspaces.

(With PTI Inputs)