Banking, financial services and insurance (BFSI) accounted for a 15.4% share in office leasing followed by captive centres (GCCs) with a 14% share. Engineering and manufacturing sector also saw notable contributions with 13.2% share in gross leasing.
The IT-BPM (27.0%) sector on yearly basis also saw the maximum share followed by captive centres (GCCs) with 21.4%, Engineering & Manufacturing sector and BFSI with 11.0% and 9.9% share respectively, the data showed.
During the quarter, pre-commitment activity was 1.82 million sq ft compared to 5.26 million sq ft in the previous quarter, as major cities witnessed lower pre-commitments during the quarter.
Property markets like Bengaluru, Hyderabad, Pune and Ahmedabad saw pre-commitments during the quarter. However, on a yearly basis, pre-commitments stood at 12.93 million sq ft which is 27% lower compared to 2019.
Southern cities of Bengaluru, Hyderabad and Chennai contributed the most towards pre-commitments in 2020 with a share of 39.5%, 26.9% and 16.6% respectively.
“Since the outbreak of the pandemic, the office sector in India has undergone a variety of cyclical and structural changes. However, we are seeing the gradual recovery in leasing activity and it will get better by the first half of 2021 on the back of clarity on vaccine approval and roll out, stronger business and economic sentiment and healthy office space demand, especially from global multinational corporations,” said Anshul Jain, Managing Director – SE Asia & India.
Bengaluru was the most active city in terms of gross leasing activity in Q4 with 27.1%, followed by Mumbai and Delhi NCR with 18.3% and 17.3% share. Except for Delhi-NCR, Mumbai and Pune all other cities witnessed a drop in gross leasing on a sequential basis. During 2020, Bengaluru continued to lead the charts with 27.1% share followed by Mumbai (16.5%), Delhi NCR (16.5%) and Hyderabad (15.4%) share.
The completion activity witnessed increased activity in Q4 2020, resulting in 13.17 mn sf of supply being added, which was higher by 56.0% on a sequential basis.
Office space net absorption in the December quarter stood at 6.49 million sq ft, which is higher by nearly 2.5X compared to the previous quarter. However, it is lower by nearly 35% from a year ago. Bengaluru, Hyderabad and Chennai have contributed significantly towards net absorption with share of 29.7%, 26.6% and 17.0% respectively, mainly due to projects with significant pre-commitments getting operational during the quarter which resulted in improved overall net absorption.