New Delhi: Total supply of new office space declined 32 per cent during the January-March period to 10.8 million sq ft across eight major cities as construction activities remained slow amid the coronavirus outbreak, according to Cushman & Wakefield.
New office supply stood at 15.99 million sq ft in the same period last year. Barring Mumbai and Pune, supply fell in all the eight big cities.
"Intense completion activity before the lockdown resulted in 10.8 million sq ft of supply being added in the quarter, which was a 10.2 percent quarter-on-quarter (q-o-q) rise. However, on a yearly basis, new completions were down by 32.3 percent," Cushman & Wakefield said.
Bengaluru led the way with a 41.7 percent share of new supply, followed by Mumbai and Delhi NCR with 20.7 percent and 20 percent share, respectively, it added. The construction activity is expected to slowly resume upon lifting of the lockdown,it said.
However, the consultant said that the new supply of office space will get deferred as it would take time to mobilise raw material and labourers to start construction activities once lockdown gets lifted.
As per the data, Bengaluru, the biggest commercial real estate market in India, saw 6 percent decline in new office supply at 45,15,040 sq ft during January-March 2020 from 48,18,000 sq ft in the year-ago period.
Office space supply in Hyderabad plunged 62 per cent to 10,00,000 sq ft from 26,40,000 sq ft. Delhi-NCR market saw a 42 percent drop in supply of office space to 21,62,631 sq ft from 37,37,009 sq ft.
Supply fell 88 per cent in Chennai to 65,000 sq ft from 5,36,783 sq ft. There was no new supply of office space in Kolkata, so it was a 100 percent drop from 7,43,000 sq ft in January-March 2019.
Ahmedabad reported a 69 percent decline in office supply to 4,26,695 sq ft from 13,55,154 sq ft.
However, office supply in Pune jumped three-folds to 4,06,000 sq ft from 1,33,400 sq ft.
New office space supply in Mumbai, too, rose by 11 percent to 22,45,000 sq ft during January-March 2020 from 20,27,807 sq ft in the year-ago period.
Earlier, the consultant had said that net leasing of office space also dropped 37 percent in the first three months of this calendar year across these eight cities at 7.4 million sq ft as corporates deferred their decisions to hire workspace amid global economic slowdown caused by COVID-19.
Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. In 2019, the firm had revenue of USD 8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services.