Demand for new leases and expansion mostly comes from IT and ITeS sectors : Kallash Babar & Sobla Khan
Mumbai | Bengaluru: Vacancy levels across the country’s large office parks that have been impacted in the backdrop of the Covid-19 pandemic are showing signs of recovery, given the deal pipeline and discussions between developers and both existing and prospective occupiers. Most of the demand for new leases and expansion is originating from the information technology and IT-enabled services (ITeS) sectors that have been witnessing a surge in talent acquisition owing to robust business performance. “Discussions for office leasing that were on hold due to the pandemic have revived and even virtual site visits are helping the talks move further. The pipeline for large commercial deals is gaining momentum once again,” said Ramesh Nair, CEO-India at Colliers. Indian real estate investment trusts (REITs) saw strong rental collections of over 99% in the April-June quarter and were able to achieve healthy releasing spreads along with contractual escalations. However, according to an ICICI Securities report, overall
portfolio vacancy levels at June-end increased 100-200 basis points (bps) or 1-2 percentage points sequentially for REITs of Embassy Mindspace and Brookfield apart from real estate firm DLF owing to continued work-from-home and second Covid-19 wave leading to deferment of leasing decisions by occupiers. Following the onset of the first Covid wave, pan-India Grade A office vacancy levels across the country’s top seven cities rose more than 300 bps till June-end to 16.6% , said the report. While the second wave of the pandemic may lead to a further rise in vacancy levels in the September quarter, ICICI Securities
High Hopes
DEAL PIPELINE, discussions between developers and both existing and prospective occupiers revived
RE/TS SEE strong 99% rental collections in June quarter

ACTIVE REQUEST for proposals (REP) for 26 million sq ft already floated in the market
HIRING IN Indian IT indus-try, mainstay of offices demand, to be double the average in past 5 years ACCELERATED VACCINATION, learnings so far to help developers, occupiers tide over possibility of third wave
expects this trend to reverse from the second half of the financial year assuming that vaccinations pick up, accompanied by a gradual return to offices and a possible pickup in international travel. “The interest among existing and potential tenants for office spaces has accelerated in the last two months. The India office growth story continues to be on a strong footing,” Mike Holland, CEO, Embassy REIT, told ET. “The increased hiring being witnessed in the IT industry is an indication of robust growth in demand for office leasing in the country” “Enquiries have picked up momentum in the last four-six weeks and the prospective tenant partners, especially the ones in the IT/new-age tech space are looking at future space solutions. Our teams are in various stages of discussion for leasing space with them,” said Sriram Khattar spaces managing director-rental business, DLF.