Kolkata: Office space leasing in Kolkata surged by 60 percent Y-o-Y and stood at 0.3 mn. sq. ft. in Jul-Sep ‘23 compared to 0.2 mn. sq. ft. in Jul-Sep ‘22, according to the report of the CBRE South Asia Pvt. Ltd, India’s leading real estate consulting firm announced the findings of its latest office report, ‘CBRE India Office Figures Q3 2023’ on Tuesday.
The key sectors that drove absorption included Technology (50 pc), research, consulting & analytics (16 pc) and flexible space operators (14 pc).
The key transactions recorded in the city during Jul-Sep ‘23 were – Capgemini leased 65,000 sq. ft. in Candor Tech Space, CodeClouds leased 25,000 sq. ft. in Globsyn Crystal Awfis leased 20,000 sq. ft. in Siddha Esplanade On a pan-India basis, office leasing activity across 9 cities increased by 33 pc Y-o-Y and touched 15.8 mn. sq. ft. during the Jul-Sep’23 period.
The share of Banking, Financial Services and Insurance (BFSI) firms constituted 29 pc of total leasing in the office sector during the quarter.
Mumbai, Bangalore and Hyderabad dominated the absorption in Jul-Sep ’23 period, collectively accounting for about 60% of the transaction activity.
During the Jul-Sep ‘23 quarter, leasing activity was also driven by technology companies, comprising a 23 pc share, followed by engineering and manufacturing companies (10 pc), life sciences firms (10 pc), flexible space operators (8 pc), and research, consulting, and analytics firms (7 pc).
American and domestic firms equally lead the absorption in Jul-Sep ‘23 period with a share of 42 pc each.
In the Jul-Sep ‘23 period, the total office space supply across 9 cities surged to 19.3 million sq. ft., recording a 94 pc Y-o-Y increase. Bangalore, Hyderabad and Pune dominated new completions in Jul-Sep’23 with a share of 77 pc. The non-SEZ sector remained at the forefront of development completions in the quarter (Jul-Sep’23), increasing its share from 75 pc in the previous quarter (Apr-Jun) to 95pc.
According to the report, highlighting the ongoing sustainability commitment of developers, over half (53 pc) of the completed projects in Jul-Sep ‘23 period were green-compliant and received green certifications, such as LEED or IGBC.
Small-sized (less than 10,000 sq. ft.) to medium-sized (10,000 – 50,000 sq. ft.) transactions drove office space take-up in Jul-Sep ‘23 with a share of 86 pc, which was largely stable on a quarterly basis.
The share of large-sized deals (more than 100,000 sq. ft.) saw a slight uptick, from 6 pc in the previous quarter to 7pc in Jul-Sep ‘23. Bangalore and Hyderabad took the lead in large-sized deal closures during the quarter, with Chennai and Delhi-NCR following suit. A few other such transactions were also reported in Pune and Mumbai.
“India’s office sector has outperformed expectations this year with sustained absorption, driven by optimistic occupier sentiment and a surge in inquiries. While the office sector in 2023 is likely to perform better than predicted at the beginning of the year, India has demonstrated resilience in the face of global economic challenges and remains one of the most attractive destinations for global corporations establishing their global capability centres (GCCs). Simultaneously, domestic companies, particularly in sectors such as BFSI (Banking, Financial Services, and Insurance) and engineering & manufacturing, are displaying an increasing appetite for office spaces in major cities,” company chairman & CEO Anshuman Magazine said.
“Bangalore, followed by Delhi-NCR, Chennai and Hyderabad, are expected to drive absorption in 2023, while Mumbai, Pune and Kolkata are also likely to witness steady space take-up during the year. Moreover, global and domestic technology firms and consulting companies are exploring opportunities in select tier-II markets, drawn by improved infrastructure, a skilled talent pool, and attractive rental options,” he added.
