Market activity peaked during the fourth quarter of 2020, as new Covid-19 infections trended lower and the near-term visibility of a viable vaccine increased. Lease transactions for large office spaces are being registered across key
property markets led by steady economic recovery, aggressive vaccination drive across the country and rising number of corporates planning return of workforces to offices.
Global organisations and domestic corporations including Google, Intel Technology, ABB, WeWork and Veritas Software Technologies, Samsung India Electronics and Future Technology School Foundation have picked up large
office spaces in the past few months. Companies have concluded and registered over 15 leases for offices spread across more than 1 lakh sq ft each totaling 3.6 million sq ft in the last four
months, showed data from real estate analytics firm Propstack. These are transactions for new offices and exclude lease renewals. “Leasing momentum is back as most offices are safely implementing Returnto-Work. Enquiries have picked up around city centers and so has the leasing
activity. Second wave saw a few fence sitters and those have now converted into deals adding to the overall buoyancy,” said Quaiser Parvez, CEO, Nucleus Office Parks, a Blackstone Group entity. According to industry experts, commercial real estate transaction volumes have been inversely correlated with the perceived intensity of the pandemic.
Market activity peaked during the fourth quarter of 2020, as new Covid-19 infections trended lower and the near-term visibility of a viable vaccine increased. “These deals clearly indicate that corporations have started making decisions
regarding their office spaces. Indecisiveness due to lack of clarity on the COVID situation is gradually being replaced by decisive moves to achieve short to medium term objectives. A clear trend with respect to occupiers
acting on their long-term expansion goals is likely to emerge after sometime,” said Raja Seetharaman, Director, Propstack.
The second wave of infections impacted transacted volumes during the June quarter and the current recovery reflects the comparative easing of the impact of the pandemic.
However, the pandemic has resulted in change in occupiers’ mindset and newlearnings for developers. According to Nucleus’ Parvez, premium assets will not be evaluated on rents
alone going forward but on health, safety and environment standards too. Digital adaptation, amenities and sustainability are core areas of consideration for tenants and Grade A buildings that implement these will
have better rates of conversion and tenancy uptake. Many information technology and IT-enabled services firms are already on a hiring spree amid acceleration in their overall business post the first Covid
wave. According to industry experts, this eventually bodes well for overall office space demand in 2022 and 2023, when it may see return of normalcy coupled with the newly added workforce.
The IT, ITeS sectors are among the prime drivers of overall leasing activity in the top cities and bulk hiring by these firms will influence demand for large quality office spaces.
The July-September quarter has already witnessed a sharp uptick in absorption of office spaces led by leasing activity in the information technology and IT-enabled services sector.
The office leasing for the quarter witnessed an over 2.6 times growth at 12.5 million sq ft across 8 key property markets of India, showed a recent Knight Frank India report.
With this, the total office real estate transactions have reached 83% of prepandemic level quarterly average witnessed in 2019.
Source : ET / E-Paper / 13th Oct 2021