About 341 office space leases in Grade A buildings in Bengaluru adding to more than 9 million square feet is likely to expire this year, according to commercial data information and analytics firm Propstack.
The average monthly rentals of the leases expiring in 2017 is of Rs 57 per sq ft per month, leading to a total monthly rental payout of about Rs 56 crore.
The IT/ ITeS industry contributes to nearly 66% of the leases expiring of sizes above 1 lakh sq ft this year, followed by the banking and financial services industry (BFSI) back offices at 18.5%.
Slowdown in startups and revision of US policies towards the IT industry may negatively impact the rentals in the medium to long term, according to Raja Seetharaman, Director, Propstack.
“Office rentals are marginally improving in some buildings/micro markets but steady overall,” he said.
About 23% of the expiring office lease deals are below 5,000 sq ft while 77% are above 5,000 sq ft.
Bengaluru witnessed the highest office space absorption across the top cities in 2016 registerng a 28% rise to 12.7 million square feet, according to a recent data.
“While there are internal and external challenges, the office market is generally vibrant at present and will continue to remain so in the short term, feels Seetharaman.
The BFSI sector dominates the office leasing scenario in Bengaluru with 33% of the office leasing share, followed by IT/ITeS grabbing a 28% share, pharma & manufacturing with 17% and other industries taking up 22% share.
Source: The Economic Times
