Office leasing by BPMs reports slowdown: Cushman & Wakefield
According to it, IT firms leased smaller offices at an average of 23,000sqf in Q1, from an average of 35,000sqf in Q1 2017.
Mumbai: The IT-BPM sector, which has a higher share in office lease activities in top cities recorded 30 per cent lower uptake of office space in Q1 2018 as compared to the same period last year on account of slowdown in fresh hiring amidst multiple headwinds faced by the sector.
According to property consultant Cushman & Wakefield, companies from the IT-BPM sector leased lower space at approximately 2.7 million square feet across the top eight cities in Q1 2018 following which its share in total leasing declined to 37 per cent in Q1 2018 from 46 per cent in Q1 2017.
The property consultant noted that the IT-BPM sector is grappling with challenges on several fronts ranging from protectionist policies in countries such as US, advent of robotics and AI, and lower IT spending.
According to it, IT firms leased smaller offices at an average of 23,000sqf in Q1, from an average of 35,000sqf in Q1 2017.
Bengaluru, which has the numero-uno position in the technology space, recorded 36 per cent lower leasing by IT-BPM companies, while their leasing declined by 16 per cent in Hyderabad.
“Currently, the IT-BPM industry is going through a new phase of growth wherein hiring is restrained in the face of newer technologies like robotics, AI. However, in subsequent quarters, we expect IT-BPM companies to step up hiring for new skills required for enabling newer technology. Some big-ticket deals continue to take place in this IT-BPM space, and we expect that to continue in subsequent quarters,” said Anshul Jain, country head & MD, Cushman & Wakefield, India.
During the quarter, healthcare and pharmaceutical sector overtook the BFSI sector to emerge as the second highest lessor of office space, trailing behind the IT-BPM sector.
Healthcare and pharmaceutical sector’s leasing increased seven-fold from Q1 2017 to approximately 1 msf, with both international and national developers taking up larger offices during the quarter.
Bengaluru accounted for the highest share in the sector’s leasing, followed by Hyderabad and Mumbai.