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Leasing activity up as demand for office space soars

Leasing activity up as demand for office space soars
leasing activity across the country in 2019 to a new record high. The demand is expected to remain strong in 2020 with occupiers’ preference for pre-leasing commercial real estate to future-proof their portfolios and hedge against rental escalations.

India’s commercial space absorption hit a new high of over 60 million sq ft in 2019, showed two independent data reports. Pan India gross office leasing volumes touched a 69.4 million sq ft in 2019, compared to 49.5 million sq ft a year ago, according to Cushman & Wakefield.

Gross leasing activity, according to CBRE South Asia, grew more than 25% from a year ago to touch a historichigh of 61.6 million sq ft. The year saw record breaking pre-leasing activity; vacancy levels stayed low despite robust supply and rentals continues to rise owing to strong growth momentum.

“Interestingly, the absorption figure for 2019 exceeds cumulative absorption of 2018 and 2017. Occupiers from the IT space expanded their real estate portfolio aggressively and contributed to the maximum share of leasing activity across sectors,” said Anshul Jain, country head & managing director, Cushman & Wakefield India. “On many notes, the office leasing performance in India surpassed industry expectations and paves the way for an optimistic year ahead.”

Global investors continued investing in Indian real estate despite slow sales momentum in residential segment as demand for office properties was sustained and offered superior returns. Indian real estate attracted over $6.06 billion investments in 2019 led by office segment, fetching more than 40% of the total funds deployment.

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