Pharmaceutical, Healthcare Companies Dominated Leasing Activity

KOCHI:
CBRE South Asia Pvt. Ltd, India’s leading real estate consulting firm, today announced the findings of its latest India Office Market View – Q2 2019 report.

According to the CBRE report, leasing activity in the city was concentrated in SBD while rental values remained stable. Ameeth Raja, Head – Advisory & Transaction Services, Tamil Nadu and Kerala, India, CBRE South Asia Pvt. Ltd. said: “Space take up was primarily concentrated in Kakkanad in SBD and absorption was mainly driven by the closure of small-to-medium sized (less than 50,000 sq.ft.) deals in recently completed SEZs.”

Commenting on the findings of the report, Ram Chandnani, Managing Director, Advisory & Transaction Services, India, CBRE South Asia Pvt. Ltd. said, “We expect leasing activity to be driven by occupier interest towards locating in quality developments in key locations of the city in the coming quarters.”

Outlook
In 2019, the impact of technology’s disruptive changes will be clearly visible, with stakeholders undertaking various measures to counteract them, marking a paradigm shift from ‘experimentation’ to ‘transformation’. Office leasing activity is expected to strengthen in the short term, backed by corporates seeking to expand or consolidate their operations. Besides American entities, India’s position as a preferred outsourcing destination would continue attracting corporates from other geographies such as EMEA and APAC.

Further, BFSI, engineering & manufacturing, research and consulting, and flexible space corporates are also likely to account for a larger share in annual leasing activity. Pharmaceuticals, telecom and e- commerce are also likely to report higher occupier demand, driving demand for commercial space. Given the strong leasing activity already witnessed in H1 2019, by 2019 end the leasing quantum could potentially surpass the previous peak of 2018 by about 5-10% on an annual basis.

Supply completions mainly in peripheral/suburban micro-markets
The H2 2019 pipeline is expected to be marginally lower vis-à-vis the first half of 2019, dominated by Bangalore and Hyderabad where supply is anticipated to outstrip NCR and Mumbai. Chennai and Pune are likely to see the completion of large-scale tech parks/corporate developments by leading players.