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Gross Office leasing 2x times higher compared to q2 2018; Touched 18.7 MSF in q2 2019: Cushman & Wakefield India


National, 16th July 2019: The 2019 office leasing track record continues to be stellar, with 32 msf already leased out across metro cities in H1 2019. That is about 66% of the total leasing activity recorded in 2018, as per the market analysis by Cushman & Wakefield India. The IT – BPM sector makes a strong comeback by taking up about 41% of total leasing volumes this quarter, and demand for captives continue to grow. Occupiers continue to remain positive about the business ecosystem in the country as they continue invest in quality office space supply especially in cities like Bengaluru, Hyderabad, and Delhi-NCR.


Sector Q1 2019 Q2 2019
IT/BPM 22% 41%
Captive Centers 14% 15%
Co-working spaces 20% 10%
*Cushman & Wakefield Research India

Tech & IT-BPM sector accounted for the largest sectoral share in leasing at 41% in Q2 2019. Flexible workspaces have contributed close to 10% of office leasing. The demand for space was not only led by foreign players, but also home-grown operators who are creating a local co-working industry. The absorption by flexi-operators will pick up pace in the wake of developers & operators jumping onto the bandwagon.

Captive Centres accounted for 15% of the total leasing in Q2 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.



Gross leasing volumes: Q2 2019 was no exception to the strong leasing momentum typically visible every quarter in Bengaluru, with the gross leasing activity maintaining a steady increase q-o-q. As a result, H1 2019 gross space take-up already stands at 70% of the total leasing activity recorded in 2018, indicating a stronger y-o-y performance in the making. Leasing momentum expected to be backed by future supply.

Gross Leasing Volume (in msf) Q2 2018 Q1 2019 Q2 2019
Mumbai 0.908 1.957 3.421
Delhi NCR 2.238 2.788 3.404
Bengaluru 2.567 4.520 5.524
Chennai 0.831 1.013 1.450
Pune 2.106 0.723 2.043
Hyderabad 0.488 1.674 2.576
Kolkata 0.109 0.359 0.225
Ahmedabad 0.037 0.087 0.088
PAN India 9.284 13.119 18.730

Net absorption:

Net Absorption (in msf) Q2 2018 Q1 2019 Q2 2019
Mumbai 0.050 1.213 1.575
Hyderabad 1.130 2.855 5.882
Ahmedabad 0.027 0.087 0.132
Pune 0.525 0.344 1.585
Kolkata 0.083 0.351 0.166
Chennai 0.701 0.253 1.258
Bengaluru 1.983 4.776 2.561
Delhi NCR 1.848 1.371 0.954
PAN India 6.347 11.250 14.114

Vacancy rates: Cities like Bengaluru, Pune, and Hyderabad continue to witness single digit vacancies, leading to faster rental growth in these regions. Hot office markets like ORR (Bengaluru) and Madhapur (Hyderabad) continue to have ultra-tight vacancies (<5%). Similar is the case with Pune SBD – East submarkets (Kharadi, Viman Nagar and Hadapsar).

Vacancy Rate (%) Q2 2018 Q1 2019 Q2 2019
Pune 8.1% 6.3% 5.0%
Bengaluru 5.1% 5.7% 5.6%
Hyderabad 7.2% 5.9% 6.0%
Chennai 9.8% 10.3% 10.0%
Mumbai 19.9% 20.4% 20.1%
Delhi NCR 24.5% 25.4% 24.4%
Kolkata 39.2% 38.5% 37.9%
Ahmedabad 39.4% 45.7% 50.1%
PAN India 15.3% 15.6% 15.2%

Pre-commitment activity: Despite a healthy supply pipeline in Bengaluru, the pre-commitment levels in near term completions has paved the way for rental growth in the short to medium term as well. In Hyderabad, the SEZ sunset clause is nearing its deadline (March 2020), and SEZ supply pipeline of about 7.0 msf is expected in the next 10 months coming up in Gachibowli and Madhapur areas. About 34% of this SEZ supply is already pre-committed and we expect the occupiers to expand more swiftly in the next three quarters.

City Pre-commitments (in msf)
Bengaluru 2
Delhi NCR 1.04



“The Indian office markets continue to put in a strong performance with the momentum of H2 2018 pushing onwards to the strongest ever H1 performance in 2019, with gross leasing activity nearing 32 MN SF. 

The second quarter of 2019 saw leasing activity at a high of 18 MN SF, dominated by a strong showing of the IT-BPM sector, followed by captives and flex workspaces even as pre-leasing activity and term renewals saw a surge. Bengaluru pushed forward with its leadership status with a strong performance by Delhi-NCR and Mumbai being good news as well even as Hyderabad remains on its growth trajectory. The push of new supply build-out that picked up in 2015-16 is visible in heightened completions that are also supporting the surge in office space take-up. We remain on track to surpass the historic highs in leasing activity seen in 2018 which also bodes well for overall job creation in the white-collar job market.”

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


About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries. In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services.