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New Delhi: Demand for office space fell 3 percent during the first quarter of this calendar year, but rents rose as much as 8 percent in five major cities: Bengaluru, Hyderabad, Chennai, Mumbai, and Kolkata, according to the US property consultant. They dressed. The consultant expects a decrease in demand for office space in the short to medium term. Growth in rent values would also slow down due to the coronavirus pandemic. According to the data, the weighted average rental values for the five cities moved moderately, year-over-year, in the range of 0-8 percent. Average monthly rent increased by 8 percent in both Bangalore and Hyderabad to Rs 75.5 and Rs 62 per square foot, respectively.
Chennai saw a 5 percent increase in rental value to Rs 60 per square foot per month, while Mumbai witnessed a modest 2 percent increase to Rs 125 per square foot. The average value of office space rental in Calcutta remained stable at Rs 48 per square foot per month. “The top five cities of Bangalore, Mumbai, Chennai, Hyderabad and Kolkata saw an absorption of approximately 9.18 million square feet of office space during the first quarter of 2020, representing a decrease of only 3 percent over absorption observed in the corresponding period of the previous year, Vestian said in a report.
Most of the takeover was observed during the first two months of the first quarter of 2020, before the COVID-19 outbreak, the consultant said, adding that the closure led to the postponement of several large-scale leasing decisions. Office space leasing was reduced by 11 percent in Bangalore to 3.53 million square feet, while Kolkata saw a 57 percent drop to 0.15 million square feet and Hyderabad a 25 percent drop to 1.64 million square feet. However, demand in Mumbai increased by 31 percent to 2.39 million square feet. Office space leasing increased in Chennai by 23 percent to 1.47 million square feet.
New office completions for the first quarter of 2020 were at 7.5 million square feet in the five cities, a 22 percent drop from the prior year period. “Supply was affected by the spread of the COVID-19 pandemic as construction had to be stopped due to blockades in the country and the migration of the workforce to their villages,” the report said.
Shrinivas Rao, Executive Director (Asia-Pacific), Vestian, said: “The first quarter results were not so sad due to the traction observed during the first two months of the year. The consequent block to contain the COVID-19 outbreak has had large-scale repercussions throughout the industry, the consequences of which will be seen in the next 3-4 quarters. “Vestian offers consulting services in the commercial, residential, industrial, and retail sectors. and hotelier Based in Chicago, Vestian has offices in the US, India, China, Sri Lanka and the Middle East.
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