New Delhi, April 6,
2017: CBRE South
Asia Pvt. Ltd, India’s leading real estate consulting firm, today announced the
findings of its latest India Office MarketView Report – Q1, 2017.
According to the report, the
first quarter of 2017 was one of the strongest quarters for the office market
observed in recent years, with close to 8 million sq.ft. of office space take-up
recorded across key cities in the country. This is an 8% increase over Q1,
2016. Leasing activity was led by small to mid-sized deals (<50,000 sq. ft.)
accounting for almost 90% of all transactions in Q1 2017.
During the quarter, leasing activity was led by the Delhi National
Capital Region (NCR) with a share of 19% of total transacted space, followed by
Mumbai (18%) and Bangalore (18%), accounting for over almost 55% of the
transaction activity across leading cities. Transaction activity continued to
be driven by IT/ITeS corporates, garnering a share of close to 37% of overall
space leased during the quarter. However, the share of other sectors such as Engineering
& Manufacturing as well as the BFSI segments, rose marginally, accounting
for 39% in the overall space leased during the quarter. Additionally,
co-working operators continued to remain active, leasing entire recently completed
developments in Mumbai and Bangalore.
on the findings of the report, Anshuman Magazine, Chairman
–India & South East Asia, CBRE said, “The
commercial real estate market in India continues to exhibit strong performance.
We have begun the year on a strong note, with key markets recording significant
office space demand. Despite global uncertainties, the various policy initiatives (RERA, GST, Infrastructure
Status for Affordable Housing) coupled with a robust infrastructure development
roadmap, is making the country an attractive destination for corporates looking
to start up or expand operations in the country. The emergence of smaller
cities for corporate expansion is also contributing to the overall growth of
Ram Chandnani, Managing Director –
Advisory & Transaction Services, CBRE South Asia Pvt. Ltd. said, “The first quarter of the year
has set the tone for the office segment across key cities. We expect commercial activity and occupier
demand to remain steady in the coming months. With space constraints in core
micro-markets, we are noticing corporates shifting towards peripheral/sub-urban
locations which have adequate supply of quality space. While planning their
expansion strategies, corporates will continue to keep cost effectiveness,
current social and infrastructure development and overall long term benefits of
a location in mind before expanding.
With the concept of co-working spaces gaining prominence among start-ups
and established corporates, we expect new office spaces to embrace this concept
in their future designs.”
City Highlights –
City witnessed a decline in leasing activity during the quarter
Thane and Navi Mumbai account for more than 45% of total transaction activity
New supply came into Airoli, Goregaon, Kurla and Andheri
80% of total demand witnessed from ORR, CBD and NBD
Engineering & Manufacturing, IT/ITeS and BFSI segments were the main occupiers of space in the quarter
The city witnessed a 3 time rise in leasing activity in Q1 2017 on a y-o-y basis with a 14% share.
Rental growth of 2 - 4% q-o-q.
On the supply front, 19% of the entire supply for the quarter was recorded in the city
Transaction activity witnessed an increase on a quarterly basis
80% of the leasing activity was concentrated in the SBD
An increase in rental values witnessed in the CBD
During the quarter, 3.1 mn sq.ft. of new
supply entered the key markets. Most of this supply is concentrated in
peripheral locations of leading cities, which is likely to attract enhanced
enquiries and strong pre-commitment activity in the coming months. Going
forward, a significant quantum of space is expected to be released in the
decentralized locations of leading cities over the next few quarters. Overall
demand for office space is expected to remain strong during the year with RERA
and REIT’s having a positive impact on the market.
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.