Although leasing activity declined by 13 per cent YoY in Asia Pacific in Q2, volumes were down only 2 per cent 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. Delhi-NCR has continued to be the regional leader for leasing volumes while Bengaluru also came ahead of other active regional markets, including Guangzhou, Manila and Melbourne.
Higher levels of activity in Bengaluru (+11 per cent) and Delhi-NCR (+14 per cent) were, however, offset by lower levels of take-up in Mumbai (-23 per cent) and Chennai (-53 per cent). While Mumbai saw lower volumes in Q2 as a few big-ticket deals did not crystalise in time, Chennai suffered from lack of quality office spaces in a low vacancy market. Aggregate gross leasing for four of India Tier-I cities registered a small 3 per cent decline in H12017.
The first-half of 2017 has seen take-up reach just under 10 million sq ft across the four major cities, which is slightly less than H12016 when the take-up exceeded 10 million sq ft. Traditional sectors remained the primary demand drivers but uncertainty surrounding US offshoring policy and automation has seen ITeS’ firms exercise caution. Co-working operators have started to be major contributors of space take-up.
What happened in other leading markets?