Markets
BSE See NSE See 38,363.47
268.40 (0.7%)

Press Release

With a 7% Share of Leasing in H1 2018, Coworking Operators Make an Impact in the Office Services Market: Colliers International India

With a 7% Share of Leasing in H1 2018, Coworking Operators Make an Impact in the Office Services Market: Colliers International India

GURUGRAM, India, July 31, 2018 /PRNewswire/ --

Maintaining the momentum of the first quarter of 2018, office take up continued to boom with 12.6 million sq. ft. leased in the second quarter. As per Colliers International, the overall absorption for H1 2018 now stands at ~ 24 million sq. ft. Bengaluru (Bangalore) continued to account for the highest share of absorption at 34% in Q2, followed by the National Capital Region (NCR) at 28%, Mumbai at 14%, Hyderabad and Chennai at 8% each, Pune at 6%, and Kolkata at 2%. Use of coworking space is becoming a popular trend, with 7% share of leasing in H1 2018. Besides its cost-effectiveness and flexibility, the increasing uncertainty among occupiers regarding their future headcount growth is driving the demand of coworking spaces. Colliers expects the coworking concept to continue expanding notably in cities such as Mumbai, Bengaluru and NCR.

Institutional investment in commercial assets also remained solid with investors continuing to buy pre-leased and buildings near completion. In Q2, the Indiabulls fund was reported as having bought Trivium, a 1.0 million sq. ft. (0.1 million sq. m) multi-phase commercial development in Hyderabad. Blackstone LP acquired One Indiabulls Park (2.4 million sq. ft. or 0.22 million sq. m); and Ascendas agreed to buy two towers in the QPark technology park in Navi Mumbai.

"With the Indian GDP forecasted to grow at above 7% annually over 2018-2022, primarily led by cities such as Bengaluru and Hyderabad. This economic growth should drive demand for Grade A office space and increase institutional investments in premium commercial office assets in the next three years," said Ritesh Sachdev, Senior Executive Director, Occupier Services at Colliers International India.  

Bengaluru (Bangalore)  

In Q2 2018, Bengaluru retained its leading position in pan-India office space absorption, recording 4.3 million sq. ft. of gross absorption. A YOY increase of 13% in gross absorption indicates occupiers are sufficiently confident in their business to take more space in the market. A total of 8.2 million sq.ft. of gross leasing has been recorded in H1 2018, out of Colliers' yearly projection of 14 million sq.ft. by the end of 2018.

ORR continued its dominance as the most popular micromarket in Q2 2018, accounting for 50% of overall demand. Other popular micromarkets include the Central Business District (CBD) accounting for 20% of demand, the Secondary Business District (SBD) accounting for 12%, Whitefield for 9% and North for 6% of demand.

NCR  

NCR accounted for 28% of the total office absorption pie in India, next to Bengaluru at ~3.5 million sq.ft. in Q2, 2018.  

Gurgaon  

Following the previous quarter's trend, the demand momentum continued in Q2 2018. With gross office uptake at 2 million sq.ft. in Q2, uptake in H1 2018 amounted to 3.7 million sq. ft.an increase of 111% YOY. Technology companies accounted for 33% of the total leasing volume followed by Banking, Finance and Insurance companies with 27% and the flexible workspace operators with 20%.

In line with our forecast, the Golf Course Extension Road (GCER) started capturing the largest share of the total demand. In Q2 GCER accounted for 30% of the leasing volume leaving behind traditionally favorable markets such as Cybercity at 18%, Golf Course Road at 15%, Udyog Vihar at 11% and MG Road at 10%.

Delhi  

Absorption levels in Delhi stayed low during Q2 2018 with just 0.15 million sq.ft. of gross absorption, down 42% QOQ. The YTD office space take up was around 0.4 million sq. ft. Aerocity accounted for around 35% of the overall leasing activity, followed by the CBD with 32% of leasing and Nehru Place with only 10%.

NOIDA  

In Q2 2018, NOIDA's office market recorded about 1.0 million sq. ft. of gross absorption, taking the YTD numbers to 2.0 million sq. ft. This is about double the same period in 2017. Amongst major occupiers, the technology sector accounted for around 42% of gross absorption followed by engineering and manufacturing sector at 23%, banking, financial services and insurance sector at 15%.

Pune  

Pune recorded gross absorption of 0.8 million sq.ft. during Q2 2018, which is about the same YOY. Owing to the robust absorption in Q1 2018, the half-year absorption stood at 2.7 million sq. ft. Fifty per cent of the half-yearly leasing was driven by technology occupiers, while the remainder comprised Banking and Financial Services Institutions, manufacturing and flexible workspace operators. The Q2 absorption was concentrated in the Kharadi and Hinjewadi micromarkets, together accounting for half of the pie. Continued interest was witnessed in Special Economic Zones projects that accounted for the remaining 50% share.

Mumbai  

Mumbai recorded gross absorption of 1.7 million sq.ft. in Q2 2018 taking the total for H1 2018 to 3.7 million sq. ft. This represents a 27% increase from H1 2017. In Q2 2018, leasing activity was concentrated in the micromarkets of Andheri East and Bandra-Kurla Complex (BKC), with shares of 38% and 14% respectively. Demand continued to be driven by flexible workspace operators which took a 20% share, followed by BFSI with a 16% share and then the IT-ITeS, consulting and logistics sectors. The preferred micromarkets for flexible workspace operators were Andheri East, BKC, Navi Mumbai and Worli/Prabhadevi.

Chennai  

With about 1.08 million sq.ft. of leasing volume in Q2 2018, Chennai's gross absorption has reached around 2 million sq. ft. (0.18 million sq. m) in the first half of 2018, like the same period in 2017. We expect the gross absorption in second half of the year to be higher than the H1 2018, in line with the absorption trends in 2015-2017. In Q2 2018, the OMR pre-toll micromarket accounted for a maximum share of city's total office leasing at 28%. The MPH road and CBD micromarkets accounted for a share of about 20% of gross absorption each followed by Off CBD at 16%, OMR post-toll at 14%, Grand Southern Trunk (GST) Road and Ambattur at 1% each.

Hyderabad  

With about 1.0 million sq.ft. of office leasing in Q2 2018, Hyderabad recorded approximately 1.5 million sq. ft. (0.1 million sq. m) of gross absorption in H1 2018, representing a 38% dip from H1 2017. In our opinion, the considerable dip in office leasing is primarily due to the limited availability of Grade A office supply in the Secondary Business District (SBD), the city's favourite market, where the vacancy rate is as low as 3.0%.

Nonetheless, about 1.1 million sq. ft. of space has been pre-committed in Q2 2018 indicating a healthy demand for Grade A office space.

Kolkata  

Q2 ended with gross absorption of about 0.2 million sq.ft., similar to Q1 2018. Sector V and Peripheral Business District (PBD) accounted for 70% and 20% of the leasing volume respectively. A scarcity of Grade A stock in the Central Business District (CBD) led to lower levels of absorption with most transactions being 3,000-8,000 sq. ft. Space take-up by flexible workspace operators like Apeejay Business Center indicates a growth of occupier interest in flexible workspace centers. Demand came primarily from the Engineering and Manufacturing sector, accounting for 43% of total leasing. This was followed by Information Technology enabled Services (IT/ITeS) at 22% and Banking, Finance and Insurance Services (BFSI) which accounted for about 15% of total leasing.

"The growth outlook for commercial real estate remains optimistic driven by financial and business services sectors across cities. In our opinion, the forecasted robust economic growth should drive demand for Grade A office space and increase institutional investments in premium commercial office assets in the next three years. Occupiers should realign their office portfolios as per the new workforce requirements by making use of flexible workspace while developers should focus on adding premium amenities in their upcoming development to meet the changing occupiers' requirements", says Surabhi Arora, Senior Associate Director, Research at Colliers International India.  

About Colliers International Group Inc.  

Colliers International Group Inc. (NASDAQ: CIGI) (TSX: CIGI) is an industry-leading real estate services company with a global brand operating in 69 countries and a workforce of more than 13,000 skilled professionals serving clients in the world's most important markets. Colliers is the fastest-growing publicly listed global real estate services company, with 2017 corporate revenues of $2.3 billion ($2.7 billion including affiliates). With an enterprising culture and significant employee ownership and control, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting.

Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 13 consecutive years, more than any other real estate services firm. Colliers has also been ranked the number one property manager in the world by Commercial Property Executive for two years in a row.

For the latest news from Colliers India, visit http://www.colliers.com/en-gb/india. To follow us on twitter, simply click on this twitter handle @Colliersintlind and to follow us on LinkedIn, simply click here.


For further information, please contact:
Sukanya Dasgupta
General Manager
Marketing & Communications
Colliers International India
Phone: +91-9811867682/ +91-8826377335
Email: Sukanya.dasgupta@colliers.com


 

NewswireList

 
India's most trusted developer, Puravankara Limited bagged the prestigious 'People's Choice Award' for the Favourite Real Estate Developer -South Zone at CNBC-Awaaz India's prestigious Real Estate Awards 2018-19. The award is presented to the most tr...
The Reserve Bank of India (RBI) has provided the Renewal of Authorization for Vakrangee Limited. RBI has extended the validity of Authorization issued to Vakrangee limited to setup, own and operate the White Label ATMs in India. The validity has been...
Crossroads is one of India' s most trusted solutions for roadside emergencies with a premier network of Road Side Assistance (RSA) providers. They are now providing bidding-based repair services through a supporting mobile app which will connect vehi...
Building on the hiring momentum seen last year, 2019 is expected to see a 10-12% increase in hiring activity With no headwinds to deal with - such as demonetization, GST implementation, and revised H1B regulations that affected the industry last year...
Tech experts from Tata Communications, Bosch, Infor, Microsoft, Unlimit (A Reliance Group Company) and Software Technology Parks of India converged at the Future Factory India Confex 2019 in Mumbai to discuss the convergence of IT & OT and the many c...
Social Kinnect, India's foremost independent digital marketing agency, created and executed a video for fbb that combined pop culture and fashion which will soon become the voice of the Indian millennial.fbb is a pioneer brand in the retail space in ...
Over the years, Bengaluru has seen the rise of the affluent class in the city. Strong economic growth coupled with an increasing number of entrepreneurs and the influx of multinational companies setting base in the city being some of the key reasons....
12345678910...