Despite currency fluctuations, gross leasing activity in India has been buoyant across the seven major cities. The major cities have witnessed leasing activity to the tune of 36.4 million square feet in the first nine months of 2018, up 26 per cent year-on-year (YoY).

“In the first nine months of 2018, Bengaluru again saw the bulk (30 per cent) of leasing activity during Q3 at 3.7 million sq ft, followed by Hyderabad, which replaced Mumbai to be the second most active market,” said Ritesh Sachdev, Senior Executive Director, Occupier Services at Colliers International India.

Pan-India demand for Grade A office space was driven by the technology sector (48 per cent) in Q3 2018, followed by banking and insurance, representing 19 per cent of the total leasing volume. The need for workspace efficiency and a collaborative work environment has increased the demand for a flexible workspace, which accounted for 13 per cent of the pan-India office leasing volume in Q3 2018.

Leasing activity in Hyderabad doubled over Q2 to 2.1 million sq ft owing to large transactions by technology occupiers in the Secondary Business District (SBD) micro market.

“India’s GDP growth should reach about 7.5 per cent for 2018 and stay strong for several years. Firm growth should fuel expansion in property and attract investment. For 2018-2021, we see the average gross absorption of 46 million sq ft to exceed the average new supply of 41.2 million sq ft by 12 per cent. This should push up rents by 1.9 per cent annually on average. Bengaluru should see the fastest growth at 4.1 per cent,” said Megha Maan, Senior Associate Director, Research, at Colliers International India.