The commercial leasing witnessed a drop of about 21% in Q3 2017 with about 1.24 million sq ft (0.12 million sq m) of gross absorption (gross leasing volume of 1.88 million sq ft in Q3 2016). According to Colliers Research survey, the YTD absorption is recorded as 3.32 million sq ft (0.31 million sq m). The market performance continued to be intense in the SBD as about 80% of the total leasing volume was concentrated in this micromarket. The Off-Central Business District (Off-CBD) accounted 11% of the absorption pie while CBD and PBD continued with a stable trend of about 4% share by each of the micromarkets.
“The commercial market should make further progress in leasing transactions after a short-term dip and the demand is likely to gain pace over 2018. The demand will remain concentrated in the SBD micromarket in short to medium term given the robust expansion plans of prominent technology players”, says Hari Prakash, Senior General Manager, Office Services, Colliers International India.
The total share of space taken up by Information Technology and Information Technology enabled Services (IT-ITeS) companies dropped from 92% in Q2 2017 to 64% in Q3. However, with large size deals sealed by Banking Financial Service and Insurance (BFSI) players, the sector accounted for a notable 17% share while health care and consulting companies contributed about 6% and 4% each respectively.
As per Colliers Research, 0.8 million sq ft (0.07 million sq m) of upcoming supply has been precommitted. The city is also witnessing a healthy supply pipeline for the next three years
concentrated predominantly in the SBD micromarket. The upcoming supply should entice the attention of large-scale IT occupiers as Q3 2017 vacancy levels are as low as 4% in Grade A office spaces and are likely to continue until the end of 2017.