The leasing of office space remained flat at 41.7 million sq. ft, but the average rental increased by 3% during a few years. The expansion of small to large scale of businesses now in need of smart solution of space management such as co-working space. Co-working space and building that offers rent to the companies are the defining stories of the past few years.
Across Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Pune, Hyderabad and Ahmedabad these cities, co-working space providers are risen up around 1.3 million sq. ft of office space during these years.
Ritesh Sachdev, senior executive director, occupier services, at Colliers International India once said “Of the top 10 markets, Bengaluru has the highest representation, with six markets, reinforcing strong occupier preference,”. Bengaluru also bagged the highest rental appreciation in the range of 10% to 32%.
Demand for office space burst up in the third quarter. Approximately 12.3 million square feet are taken up and 23% growth is noticed from the period of last year. 32% and 22% hike on rent are noticed in Bannerghatta Road and Electronic City, according to Colliers.
In other micro-markets in Chennai, Kolkata, and Pune, where rentals increased about 10%. Grade-A office space demand in the technology sector is 48% of the total leasing volume, followed by banking and insurance is 19%. The collaborative environment and flexible work space are a need and this is the drive of this increasing demand.
Demands in Kolkata
In Kolkata recorded a 10.5% rental increase in Q3 2018. Companies from various sectors have expanded their office space in this micro market in Q3 2018. Due to the limited availability of Grade A office space and the demand in the micro market, the rents are growing fast and the office rentals see double digit growth in Q3.
Demands in Mumbai
Mumbai the metropolitan region is also under double digit growth in office rentals. Last few years it was affordable like, Rs. 110 to Rs. 185 per sq. Feet in a month. But at present year the office rental spaces have declined from 30% to 11%. Due to lack of rental stocks, the rent has been increased proportionately. Not only that, The BKC’s share also decreased to 10% gradually.
Demands in New Delhi
The office rental in India are in trouble now due to lack of feasible space from past few years. As the demand is increasing day by day but the lack of space is failed to fulfill the required demand. The office space stocks endure at 41.7 million sq. Feet, but the rental increased by 7% in 2016 and 3% in 2017.
Demands in Chennai
Chennai is also beholding 10% rental increase in Q3 in 2018. The demand of office space stocks is changing to 41%. So, the occupied proximate floor owners are focusing on extending strategy further to balance the micro market.
Demands in Hyderabad
According to industry specialists, in south India the growth has secured around 100 million sq. Feet of quality space for office. In Hyderabad it has seen to be led by 78% adding up to the stock. By the report of estate consultants of India, the stock of A grade office space stock was 49 million in 2017. Demands are sky high and there are the scarcity of space and also low vacancy of premium Grade-A office buildings. So commercial office rentals are growing at a high rate in the micro-markets of top cities. From the past few years, the rentals are rising high 9.4-32% in the micro-markets. Due to high demand office rentals see double digit growth in Q3.