Delhi-NCR, Bangalore lead Asia-Pacific H1 2017 office leasing: JLL Report
A recent JLL India report showed that office property market of Delhi-National Capital Region continued to be the leader for leasing volumes across Asia-pacific region during the first half of 2017. Apart from Delhi-NCR, Bengaluru also came ahead of other active regional markets, including Guangzhou, Manila and Melbourne. Aggregate gross leasing for four of India tier-I cities including Mumbai, Delhi-NCR, Bengaluru and Chennai registered a small 3% decline in the first half of 2017.
Although leasing activity declined by 13% year-on-year in Asia Pacific in the second quarter ending June, volumes were down only 2% in the first half of the year, indicating stable leasing levels across the region. Cities like Seoul and Taipei saw sluggish tenant demand impacting leasing activity.
A higher level of absorption activity was seen in Bengaluru with 11% growth and 14% rise in Delhi-NCR. However, this was offset by lower levels of take-up in Mumbai that saw 23% dip and 53% drop in Chennai. While Mumbai saw lower volumes in the second quarter as a few big-ticket deals did not crystalize in time, Chennai suffered from lack of quality office spaces in a low vacancy market.
The first half of 2017 has seen take-up reach just less than 10 million sq ft across the four major cities, which is slightly less than the year ago period when the take-up had exceeded 10 million sq ft.
Traditional sectors remained the primary demand drivers but uncertainty surrounding US offshoring policy and automation has seen Information Technology-enabled services’ firms exercise caution. Co-working operators have started to be major contributors of space take-up.
Global office leasing activity has been stable during the first half of 2017, with volumes virtually unchanged on the same period of 2016. For the full year 2017, JLL expects global leasing volumes to remain steady, matching the levels recorded in 2016. Volumes are projected to be somewhat higher than in 2016 in the United States, stable in Europe and slightly lower in Asia Pacific.