Hyderabad Office Space Leasing Up 55% In January-June: Realty Consultant
New Delhi: Hyderabad saw a maximum increase of 55 per cent in net office space absorption in the January-June period among eight top cities on improving business climate in the city, according to realty consultant Cushman & Wakefield.
Net office space leasing in Hyderabad rose to about 2.9 million square feet in the first half of calendar year 2016 from about 1.9 million square feet in the corresponding period of 2015.
“Improving business climate and the Telangana government’s efforts to create more visibility for ‘Brand Hyderabad’ led to the city witnessing a steep rise in net absorption in H1 2016 to 2.9 million sq ft, a 55 per cent increase from corresponding period last year,” C&W said in its report.
The competitive rentals, quality infrastructure and a proactive government have been attracting global companies to increasingly prefer to set up offices in the city, it added.
Hyderabad continues to witness strong demand for space from IT-ITeS (IT-enabled services) and technology companies. Net absorption during April-June period stood at roughly 1.7 million square feet, of which 70 per cent came in the form of previously recorded pre-commitments by IT-ITeS companies.
Among the eight major cities, the net absorption of office space increased in Hyderabad by 55 per cent, followed by Delhi-NCR (39 per cent), Ahmedabad (27 per cent) and Kolkata (10 per cent) in the first half of 2016 compared to the corresponding period a year ago.
However, net leasing of office space fell 51 per cent in Chennai, followed by Pune (41 per cent) Mumbai (36 per cent) and Bengaluru (34 per cent) during the period under review.
Overall, in the eight cities, the total net absorption of office space declined 18 per cent to 14.5 million square feet during January-June period of this calendar year, while supply fell 7 per cent to 19.9 million square feet.
Commenting on the fall in leasing activities, C&W India managing director Anshul Jain said this is going to be only temporary as the second half looks promising.
“A large number of companies have committed space foreseeing limited availability of upcoming quality stock in select markets which will push up absorption in the second half of the year. These pre-commitments are bound to steer net absorption, going forward,” he added.