BENGALURU: Bengaluru has emerged as the choicest city for office-leasing activity attracting foreign direct investments (FDIs) of $4 billion in 2020, with an overall absorption of 7.5 million square feet. Despite uncertainty in the real estate sector due to the pandemic-led disruptions, Bengaluru continues to drive the leasing activity.
Sector-wise, e-commerce, Banking, financial services and insurance (BFSI) and pharma are contributing to 50 per cent of the overall absorption, JLL India said.
“Bengaluru continues to dominate the office leasing market with an overall net absorption of 7.5 million sq ft in 2020. The overall vacancy level of sub-10 per cent has helped this segment weather the 2020 challenges. The new demand led by large e-commerce firms in the BFSI & healthcare sectors have also witnessed a sharp rise with a number of large occupiers evaluating additional growth and consolidation”, said Rahul Arora, Managing Director (Bengaluru), JLL India.
“The city has remained a landlord favorable office market for several years. With slowdown in construction and lack of funding, this trend is expected to continue”, he added.
However, as compared to the estimates of 11 million square feet, the IT city added just 9 million square feet during the year as the developers focused on pre-committed spaces and went slow on the speculative space.
Many small to mid-sized occupiers terminated spaces within the central business district and Suburban Business District markets which led to an increase in the overall vacancy.
The city is likely to add four malls during the year with an occupancy of 2.55 million square feet.