Office leasing by engineering & manufacturing firms tripled in Q2 2023: Colliers

financialexpress.com:

Q2 2023 recorded 14.6 mn sq ft of gross absorption across the top 6 cities, rising by 2% YoY, making a strong comeback after a cautious first quarter. Amidst global economic headwinds, demand continued to grow on a sequential basis, indicating a continued occupier confidence, according to Colliers’ Q2 2023 Pan India Office Market Snapshot (Grade A).

Bengaluru and Chennai led the demand during Q2 2023, accounting for about half of the total leasing across top 6 cities. After witnessing lackluster demand for the last few quarters, Chennai saw a three-fold rise in demand during Q2 2023 led by enhanced occupier activity.

Technology and Engineering & Manufacturing sectors together dominated the office leasing activity in Q2 2023, contributing to 47% of the total leasing during the quarter. Leasing by Engineering and Manufacturing firms witnessed a three-fold rise YoY, as occupiers continued to take up larger spaces across top markets. Bengaluru and Chennai were the most preferred locations for engineering and manufacturing companies for their office expansions.

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While the share of Technology continued to dip from 40% in Q2 2022 to 26% in Q2 2023 amidst weak demand scenario, it remained dominant. At the same time, they continue to blend their real estate portfolio with flex as their core strategy, attracted by the flexibility, agility, and cost-effectiveness that they offer. Leasing by flex space surged 58% YoY during the quarter, as occupiers continued to adopt flex space as a long-term strategy.

“Engineering, manufacturing, BFSI and Flex spaces have seen a strong rise in leasing, at 71% rise YoY in Q2 2023. This signals optimism along with growth in