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Co-working Is What’s Next In The 2019 Leasing Story: Cushman & Wakefield India


National, 11th April 2019: Total gross leasing volume in India touched almost 13 msf during the first quarter of 2019, which is 1.45 times higher than the corresponding quarter last year (5.3 msf) as per the market analysis by Cushman & Wakefield India.  The IT – BPM sector is on a growth trajectory, and flexible workspace is the buzzword in terms of office space demand. A robust business ecosystem supports the expansionary activity of occupiers, with pre-commitments made towards quality office space supply especially in cities like Bengaluru, Hyderabad, and Pune where vacancies continue to remain tight and in single digits.


During the first quarter of 2019, almost 1.8 msf of space was pre-committed. Our market analysis shows an interesting trend in Delhi – NCR. Owing to single digit vacancies, pre-commitment activity was expected in Hyderabad, Bengaluru, and Pune. However, the Delhi – NCR region has double digit vacancy rates, with almost 1.7 msf being vacated by occupiers as part of their relocation / consolidation plans. However, there were significant supply additions totalling to 3.7 msf in Q1 2019 across Noida & Gurugram, with around 25% of this space being pre-committed by large IT-BPM, ecommerce and flex space operators. Strong pre-commitment activity in this market region also resonates with the robust leasing activity of 2.8 msf in Q1 2019, a y-o-y growth of 82%, with an expected average annual supply of around 8.6 msf up to 2021, headlined by both core office markets as well as the growth corridors. While flexible space operators continue to move forward with their expansion plans, IT-BPM and captive centres are also expected to drive demand for large spaces in the market.

Cities like Bengaluru, Pune, and Hyderabad continue to witness single digit vacancies, leading to faster rental growth in key office markets. Hot office markets like ORR (Bengaluru) and Madhapur (Hyderabad) where vacancies are ultra-tight (<5%) have registered a rental growth of 13-18% on an annual basis. Similar is the case with Pune SBD – East (Kharadi, Viman Nagar and Hadapsar) where rentals have escalated by 8% during the year 2018.



Owing to high supply, net absorption almost doubled in Q1 2019, as compared to Q1 2018. Hyderabad, Mumbai, and Bengaluru recorded almost a 3X jump in net absorption levels. This strong growth demand is led by rapid expansion by occupiers in the technology and IT-BPM space, ramp-up by co-working players, and investments of companies in global capability centres.

Net Absorption (msf) Q1 2018 Q1 2019 Percentage increase
Mumbai 0.362 1.405 288%
Hyderabad 0.822 3.131 281%
Bengaluru 1.290 4.775 270%
*Cushman & Wakefield Research India


Sector Q1 2018 Sector Q1 2019
IT/BPM 37% IT/BPM 22%
Healthcare & Pharma 15% Co-working spaces 20%
BFSI 11% Captive Centres 14%
*Cushman & Wakefield Research India

Tech & IT-BPM sector accounted for the largest sectoral share in leasing at 22% in Q1 2019. Flexible workspaces have contributed close to 20% of office leasing. The demand for space was not only led for foreign players, but also home-grown operators who are rushing to capture a pie of this space. The absorption by flexi-operators will pick up pace in the wake of developers jumping onto the bandwagon.

The emergence of space take-up in co-working/flex affirms that corporates are aligned to the mixed portfolio strategy of fixed and flex space going forward. Flex operators shall likely grow at an even faster pace compared to 2018 with Hyderabad, Pune and Chennai as the next cities of growth, especially among the large players who have grown tremendously in Bengaluru, NCR and Mumbai over the past couple of years. That said, the latter three shall continue to see heightened activity from co-working players in 2019.

Captive Centres accounted for 14% of the total leasing in Q1 2019, as India gradually emerges as a hub for Global in-house centres/Capability centres mainly from the North American and European markets. India’s strong demographics and competitive costs continue to pull occupiers, with an increasing number of firms look to set up their global capability centres out of India. While the leasing share of Healthcare and BFSI sectors were modest in Q1 2019, at 3% and 5% respectively, the BFSI sector will see growth in leasing after the elections.



  • In Ahmedabad, we foresee about 2.5 msf of upcoming supply in 2019. Additional completions are expected during the remainder of 2019 with the SG Highway sub-market likely to contribute 58% of the overall supply pipeline followed by GIFT City with a 27% share.
  • Nearly two-thirds of new supply for Q1 2019 in Bengaluru was pre-leased. About 50% of the upcoming supply over the next three quarters is also either pre-leased, or in advanced stages of negotiations, suggesting a continuation of ultra-tight vacancies and steep rental growth scenario.
  • In Chennai, the ongoing supply crunch is expected to last till H2 2019 in the core markets. Prominent office corridors are anticipated to pump upcoming supply, which will garner appreciable levels of pre-commitments.
  • Delhi – NCR started 2019 on a strong note in terms of leasing volumes & supply pipelines. Average annual supply up to 2021 is around 8.6 msf.
  • The high pre-commitment levels in the upcoming supply coupled with a strong demand momentum are likely to keep rentals in Hyderabad on a north-bound growth curve. Nearly 1.0 msf of upcoming supply in Hyderabad was pre-leased during Q1 2019, with key examples including Intel and JPMC.
  • Select sub-markets in Mumbai like Thane-Belapur Road, Malad – Goregaon, and Bandra Kurla Complex, are expected to drive overall demand in future with a 7.3 msf of upcoming supply pipeline of quality assets projected for completion during 2019-2021.
  • Around 11 msf of supply is expected to come up in Pune over next three years, of which 6.4 msf is likely in 2019 itself. Nearly three-fourths of this supply is concentrated in SBD sub-markets while the remaining is distributed among PBD and CBD sub-markets.
New Completions (msf) Q1 2018 Q1 2019 Percentage change
Mumbai 0.29 2.027 599%
Delhi NCR 0.73 3.737 412%
Bengaluru 1.239 4.818 289%
Hyderabad 1.03 2.640 155%
Kolkata 0.623 0.743 19%
Ahmedabad 0.394 0.450 14%
Pune 0.4 0.133 -67%
PAN India 4.710 15.085 220%
*Cushman and Wakefield Research India
With a strong start across markets in 2019, the leasing activity this year is expected to gain momentum with the already high demand for quality office spaces. Demand activity is expected to heighten, with the pre-commitment activity observed as well as the increase in net absorption levels in key markets this quarter. Captive centers will be a game changer in 2019, with multiple outsourcing contracts worth around USD 51 billion (INR 355,192 Crores) up for renewal. Co-working operators can look forward to a promising 2019, by profiting from the growing interest of occupiers from across the world, and from the inclination towards a mixed portfolio strategy. With the first Indian REIT getting oversubscribed, the conditions are also favorable for developers seeking liquidity.

Anshul Jain, Country Head & Managing Director, Cushman & Wakefield India