Mumbai, Delhi-NCR, and Bengaluru together accounted for 91% of all monthly leasing activity in May 2022.
Over the last month, the total office space leased in seven locations increased by almost three times, to 6.1 million square feet.
According to property consultancy JLL India, the overall office leasing operations across seven cities increased almost three-fold over the last month to 6.1 million square feet as demand improved with the opening of workspaces.
In May 2021, when the second wave of the Covid-19 epidemic had severely impacted demand, the aggregate office market leasing activities—which refers to lease transactions for all grades of office buildings—stood at 2.2 million square feet.
From 4.8 million square feet in April 2022, the total or gross office space lease increased by 28% in seven major cities: Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, and Kolkata.
Pre-commitments that have been verified and term extensions are included in the aggregate leasing statistics.
For May 2022, Bengaluru, Delhi-NCR, and Mumbai accounted for 91% of monthly leasing activity.
The Grade ‘A’ (premium) office stock in India was 732 million square feet at the end of the March quarter, according to JLL statistics. There were 370 million square feet of office space for the remaining classes, bringing the total to almost 1.1 billion square feet.
Samantak Das, Chief Economist and Head of Research & REIS, India, JLL, responded that the improvement in total market demand traction indicates the resilience of office markets as well as the fact that physical workplaces continue to remain central to firms’ real estate plans when questioned about the sharp increase in leasing activities during May 2022.
“A time of the relative ease with minimal Covid-19 infections, high vaccination rate, complete openness of economic operations, and no mobility restrictions enabled occupiers to approach real estate planning with greater assurance,” he said.
Das issued a warning, though, that the demand for office space may be affected in the following months.
He said that India would likely gain from further offshoring/outsourcing and digital spending, given its power as a key IT destination. “We will continue to watch for headwinds like global inflationary and recessionary pressures that may impair office demand,” he said.
According to Das, India’s high talent pool and real estate prices will continue to be major factors in the country’s office market development.
Pankaj Pal, the executive director of Gurugram-based real estate company AIPL Group, stated: “Since the several previous quarters, demand for both office space and retail has increased significantly. In actuality, demand for Grade A commercial space is substantially greater “.
Regarding office space, IT businesses, outsourcing organisations, and BFSI sectors are the biggest occupants. At the same time, he noted that branded clothing, footwear, electronics, and restaurant chains account for a sizeable portion of demand in the retail sector.
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