Office leasing up 34 % in July-Sep in 6 cities; down 1 % in Jan-Sep: Colliers

The gross leasing of office space rose 34 per cent year-on-year to 10.3 million square feet during the July-September period in six major cities on higher demand from corporates and coworking operators after the second wave of the COVID pandemic, according to Colliers.

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The gross leasing stood at 7.7 million square feet in the corresponding period of the last year.

Absorption of office space grew by 89 per cent in July-September compared with the previous quarter.

"The quarter has brought in much-needed cheer for the market. Large deals made a comeback, led by demand from flexible workspace operators," Colliers India CEO Ramesh Nair said.

Nair, who is also Managing Director, Market Development | Asia, Colliers, said the decision-making by occupiers has become quicker than in 2020.

"We can expect the optimism to strengthen over the upcoming quarters, provided there is no third wave. Occupiers who were exploring renewal options have begun looking for fresh space," Nair said.

Leasing share by flexible workspace operators also rose in July-September period to 26 per cent, because of high demand from occupiers looking for managed spaces and short-term leases to tide over uncertain times.

Colliers highlighted that Hyderabad emerged as market leader in terms of office sector demand during July-September with gross leasing of 2.5 million square feet, surpassing Bengaluru.

As per the data, gross leasing in Bengaluru fell to 2.1 million square feet in July-September 2021, from 2.5 million square feet in the year-ago period.

In Chennai, the leasing rose to 1.3 million square feet, from 0.8 million square feet.

Absorption of office space in Delhi-NCR went up to 1.5 million square feet, from 0.9 million square feet.

Hyderabad witnessed a rise in demand for office space to 2.5 million square feet, from 1.9 million square feet.

The leasing transactions in Mumbai fell to 1.2 million square feet, from 1.4 million square feet.

In Pune, the gross leasing increased to 1.7 million square feet during the third quarter of this calendar year, from 0.3 million square feet in the corresponding period of the last year.

IT sector driven cities like Hyderabad, Bengaluru and Pune accounted for 62 per cent of gross absorption in Q3 of 2021.

During the January-September period of 2021, the gross absorption of office space fell marginally to 20.4 million square feet across these six cities from 20.7 million square feet in the year-ago period.

"With an increased number of fully vaccinated employees returning to their workplaces coupled with fewer restrictions on mobility, the office market is showing strong signs of revival," Colliers said.

Colliers India is part of the US-based Colliers, a leading diversified professional services and investment management company.

Colliers has operations in 67 countries and over 15,000 workforce. It had annualised revenues of USD 3 billion and USD 40 billion of assets under management.