HomeReal Estate NewsBengaluru sees 1/3rd office space transactions among top 8 cities in H2 2020

Bengaluru sees 1/3rd office space transactions among top 8 cities in H2 2020

This is an 8 percent year-on-year growth for Bengaluru and makes it the only top market – among Mumbai, Pune, NCR, Hyderabad, Chennai, Kolkata and Ahmedabad – to witness a YoY growth.

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By Mugdha Variyar  January 6, 2021, 7:15:58 PM IST (Published)

Bengaluru sees 1/3rd office space transactions among top 8 cities in H2 2020
Bengaluru has recorded over one-third of office space transactions among the top eight cities in the second half of 2020, with 7.5 million sq ft leased out, as per latest data from Knight Frank.


This is an 8 percent year-on-year growth for Bengaluru and makes it the only top market – among Mumbai, Pune, NCR, Hyderabad, Chennai, Kolkata and Ahmedabad – to witness a YoY growth.

The average deal size in Bengaluru has gone up 61 percent YoY to 90,890 sq ft. This is a significant improvement for Bengaluru as the H1 2020 Knight Frank report had said that the southern Indian city accounted for over half of office spaces surrendered across top eight property markets then.

The IT industry continues to be the top consumer of office space in the city, with a 42 percent demand share in H2 2020 against 51 percent in H2 2019, followed by the manufacturing industry which doubled its demand share to 25 percent in H2 2020 as compared to 12 percent in 2019.

A bulk of the transactions were recorded in the last quarter of the calendar year, with 6.4 mn sq ft of gross transactions. According to Knight Frank, a host of factors played a role in enabling the strong market performance for Bengaluru in Q4 2020. There was demand from those who had put their leasing plans on hold in the wake of the pandemic and associated lockdowns, and secondly, office space sign-ups came from global technology majors and large corporates.

Knight Frank said these companies are taking a strategic, long-term view on their office occupancy plans. Pre-commitment activity, including large deals by Google and Amazon have helped the Bengaluru market.

The weighted average rent remained stable on an annual basis.

Annual transaction volume, however, did fall for Bengaluru at 12.32 mn sq ft, lower by 19 percent YoY in 2020. However, this is better than the 35 percent fall in annual transaction volume for the office market overall.

For the top eight cities, transactions fell by 35 percent YoY to a six-year low of 39.4 mn sq ft in 2020, while new completions dropped by 42 percent YoY.

However, Transaction volume for the eight cities under review grew by a massive 271 percent quarter-on-quarter in Q4 2020 and has reached a 115 percent of pre-COVID-19 levels (2019 quarterly average).
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