Office Market Recorded 50% Growth in Leasing Activity From Q2 to Q3 2018: Colliers International India(12:00 Hrs. IST)
KOLKATA, November 19, 2018 /PRNewswire/ --
Kolkata recorded gross absorption of 302,939 sq ft in Q3 2018 representing a QoQ increase of about 50%. In Q3 2018, Grade A space take-up was concentrated in the Peripheral Business District (PBD) and Sector V, accounting for 43% and 38% of the total absorption, respectively. Leasing activity in Information Technology developments accounted for 37% of the total absorption in Q3 2018. This is the predominant source of demand in the city, and developers should take note when planning their future supply. This is followed by commercial office developments on 23% and IT-Special Economic Zones (SEZs) on 22%. The demand for IT developments such as IT parks and IT-SEZs is expected to increase further due to the city government's initiatives to attract technology companies.
"Commercial leasing activity over the past few quarters was restricted to mostly relocation and consolidation. However, there has been some notable expansions in the IT/ITES and coworking sectors in the last quarter. Industry friendly initiatives by the government, excellent infrastructure and availability Grade A office spaces at competitive rates has added to the overall positive sentiment," says Shubho Routh, Associate Director, Office Services (Kolkata) at Colliers International India.
Kolkata witnessed significant leasing by the Information Technology Enabled Services (IT/ITeS) occupiers accounting for 54% of the total followed by flexible workspace operators on 21% and engineering & manufacturing on 5%. The dominance of the IT/ITeS sector is expected to increase after the introduction of the Silicon Valley Hub Asia in the New Town area, which is the flagship initiative by the state administration to strengthen IT industry in the city.
Kolkata is expected to record stable robust leasing activity during 2018-2021, with aggregate gross leasing of 3.8 million sq ft of Grade A office space is projected to be leased by occupiers. In line with this, a few occupiers have already pre-committed spaces in upcoming Grade A buildings. In our opinion, major initiatives from the state government such as the Silicon Valley Hub and the new IT policy are likely to propel the market further. However, developers are advised to keep a track of the demand and plan the construction timelines over next three years to avoid oversupply by 2021.
The city-level vacancy remained high at 28.9%, with the majority of available spaces in the peripheral locations of New Town and Rajarhat. The vacancy rate is expected to stay in the range of 26-30% during 2019-2021 owing to the new supply scheduled to be delivered.
About Colliers International Group Inc.
Colliers International Group Inc. (NASDAQ: CIGI) (TSX: CIGI) is a top tier global real estate services and investment management company operating in 69 countries with a workforce of more than 13,000 professionals. Colliers is the fastest-growing publicly listed global real estate services and investment management company, with 2017 corporate revenues of $2.3 billion ($2.7 billion including affiliates). With an enterprising culture and significant employee ownership and control, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide, and through its investment management services platform, has more than $25 billion of assets under management from the world's most respected institutional real estate investors.
Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice to accelerate the success of its clients. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 13 consecutive years, more than any other real estate services firm. Colliers is ranked the number one property manager in the world by Commercial Property Executive for two years in a row.
Colliers is led by an experienced leadership team with significant equity ownership and a proven record of delivering more than 20% annualized returns for shareholders, over more than 20 years.
For the latest news from Colliers India, visit www.colliers.com/en-gb/india. Follow us on - Twitter and LinkedIn.
For further information, please contact:
Marketing & Communications
Colliers International India
Phone: +91-9811867682/ 8826377335