In India, the office space leasing that has generally been dominated by the IT/ITeS sector has been durable and confident although there were teething troubles in the beginning of 2017. Except for the predictable effect of BREXIT stir, the dawn of 2017 went through a revolutionary policy stand of the US’ Trump government that got the software industry association, NASSCOM to bring down its yearly revenue guidance.
The wave of curtailment also spread through Australia and Singapore. In the face of these challenges, commercial space core absorption in India in 2017 was in excess of 30.6 million sq ft with more than 50 big deals above 100,000 sq ft leasing with every deal exhibiting a hearty tendency of development in corporations. This is according to data from Cushman & Wakefield.
A few of the important dealings took place between large global and domestic establishments such as Microsoft, TCS, Accenture, Alibaba, Amazon, Deloitte, Google and Atos Origin taking over office spaces throughout the Indian landscape.
Though the net absorption is 7% lesser than that in the year before, it was ascribed to a parallel sluggish supply in 2017 that registered a fall of 11% annually, resulting in a dearth of quality spaces.
Anshul Jain, Country Head & MD, India, Cushman & Wakefield says, “The office leasing trends have been positive in the second half 2017 as global and national uncertainties settled. By the second half, it was clear that impact of events such as BREXIT, US FED rates revisions, GST implementations in India, RERA in India, were going to be minimum on growth of commercial real estate sector of the country”.
Jain believes that, although the GDP escalation indicated a dip in the mid quarters, the perspective for India’s GDP growth is bright, that will push firms to go ahead with their plans of growth.
The inclination of significant transactions has been gaining momentum as many companies are expanding rapidly. These companies are visualizing a robust enduring potency in India’s growth narrative. Hyderabad clears the ropes as an undisputed champion with more than 10 large transactions accomplished in 2017, with one crossing over 1.4 million sq ft leased by an international giant in the domain of consulting.
Net intake in Mumbai was largely dependent on the sustained growth in the IT/ BPM consumption in the marginal geographies of Thane-Belapur Corridor and some noteworthy front office bargains by BFSI and consulting sectors.
Pune experienced a spurt of endeavors in the last quarter dotted by some large transactions completed in the IT/ Business Process Management division. Pune continues to behave like a tough contender to Hyderabad with identical rent figures. Hyderabad that has scaled heights with its success stories for 6 quarters now, documented a soft wane of 3% in net absorption in 2017.
The break of 2017 opened to a slackening in the tempo of office leasing, because of a number of causes including the previous year’s BREXIT and American policies that were sure to hit commercial office leasing in the Indian landscape, which relied very heavily on outsourcing undertakings all over the world.
Even nations such as Australia, Singapore and some other ones declared prohibitionist approaches that had discouraged commercial emotions at the start of the year. Then gradually the climate turned friendly in the latter part of the year, driving net intake close to the last year’s figures.