Pune, 12 February, 2019 – In Q4 2018, Pune recorded gross absorption of 2.3 million sq ft, a quarterly increase of 28%. The full year 2018 saw 6.7 million sq ft of leasing activity. In line with our forecast, 2018 registered the highest annual gross absorption in the last five years. In 2018, we saw occupiers demonstrate a clear preference for IT-Special Economic Zones (IT-SEZs). Almost half (48%) of the gross absorption in 2018 was recorded in IT-SEZ developments, while 29% and 23% of total leasing was recorded in IT and Non-IT developments respectively.

“2018 saw a phenomenal growth in the city absorption. Multiple large ticket expansions coupled with a spike in co-working players visioning future leasing and achieving demand-led supply deals owed to the enhanced buoyancy in the market. We expect this momentum to continue in 2019 owing to the large infrastructure projects, which are currently underway in Pune”, says Animesh Tripathi, Director, Office Services (Pune) at Colliers International India.

The micromarkets with considerable stock of IT-SEZ developments continued to attract occupiers’ interest. In Q4 2018, 72% of the gross absorption was concentrated in the micro markets of Senapati Bapat Road, Hinjewadi, Kharadi and Hadapsar/Fursungi, distributed amongst them almost equally. The remaining gross absorption was spread across the Airport Road/Pune Station, Baner and Bund Garden micromarkets. Overall, the IT-ITeS sector accounted for the majority of demand, 49%, in Q4 2018, followed by flexible workspace operators on 19%, and engineering and manufacturing on 10%.

Reflecting positive occupier sentiment in the market, occupiers pre-committed spaces in line with their expansion plans. In Q4 2018, the city recorded 1.2 million sq ft of pre-commitments, which is equivalent to half the gross absorption recorded during the same period, and was driven by technology and flexible workspace operators. Against a backdrop of limited city-wide availability, as reflected by the single digit vacancy, occupiers are making commitments to space in buildings under construction.

In Q4 2018, Pune witnessed new supply of about 883,700 sq ft, 10% lower than the previous quarter. Of this, 57% was concentrated in the micromarket of Hadapsar/Fursungi, followed by Senapati Bapat Road on 38%, while the remaining 5% was spread across Baner and Kharadi. Almost 71% of the new supply constitutes non-IT developments while the remaining is IT-SEZ developments.

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