New Delhi: Net leasing of office space fell 37 per cent during January-March period to nearly 7.4 million sq ft across eight major cities as corporates deferred their decision to hire workspace amid global economic slowdown caused by COVID-19, according to Cushman & Wakefield.
According to the data, the net absorption of office space declined to 73,98,041 sq ft during the first three months of this year from 1,16,55,242 sq ft in the corresponding period of the last year.
"The net absorption in Q1 2020 stands at 7.40 million sq ft, which is lower by 22.6 per cent on a quarterly basis and 36.5 per cent lower on a yearly basis as transaction slippage impacted the leasing momentum towards the end of the quarter," C&W said in its quarterly report.
"The year started off with great momentum continuing from the last quarter of 2019. But by the end of Q1, the headwinds from global economic slowdown on the back of COVID-19 pandemic saw activity tapering off," said Anshul Jain, Managing Director South East Asia and India, C&W.
However, he expected the leasing activities to pick up later this year.
Office space leasing dropped in five cities out of eight covered in this report. As per the data, Bengaluru, the biggest commercial real estate market in India, saw 45 per cent decline in net office leasing at 26,26,452 sq ft during January-March 2020 from 47,95,916 sq ft in the year ago period.
Office space demand in Hyderabad plunged 69 per cent to 8,91,613 sq ft from 28,55,480 sq ft. Pune, too, saw 49 per cent drop in leasing at 1,73,026 sq ft, while Chennai recorded 42 per cent lower leasing volume at 2,03,790 sq ft.
Net office space leasing in Mumbai was down 26 per cent to 8,61,580 sq ft. However, Delhi-NCR market saw 18 per cent growth in net leasing of office space to 15,97,003 sq ft.
Similarly, Kolkata and Ahmedabad reported 36 per cent and 29 per cent rise in office demand, respectively. While 4,77,638 sq ft of net office space was absorbed in Kolkata, the figure stood at 5,66,939 sq ft in Ahmedabad.
Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. In 2019, the firm had revenue of USD 8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services.
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