Tech companies to be significant demand drivers
Colliers India expects leasing activity to pick up further by 25-30% to around 42-45 million sq. feet in the commercial office space in India for this year (2021).
“Our research suggests that this year we can expect leasing activity to pick up further by 25-30% to around 42-45 million sq. feet. Bengaluru, Hyderabad and NCR are going to continue to drive the leasing amongst the top 6 Indian cities,” Colliers India’s Senior Director & Head of Research Siddhart Goel said on 4 Jan 2021 in market outlook for 2021.
“Tech companies involved in fintech, healthcare, e-commerce, and entertainment (OTP and gaming), amongst others may be significant demand drivers even as IT-BPO companies, followed by BFSI companies will remain the main occupiers as has been the trend over the last decade,” said Joel.
“Given the impact on their business, occupiers today are averse to making heavy capex investments in their real estate operations,” according to Bhupindra Singh, Managing Director, Regional Tenant Representation (India) & Office Services (North India) at Colliers International.
“Hence, we have been seeing most of our clients, Indian as well as MNCs, looking at options for leasing managed offices that provide them with the best layouts, fit outs and services to support their business activities.
“Even as confidence in India’s economic recovery is increasing every day, the need of the hour is for developers and landlords and flexible space operators to provide innovative business solutions that provide even greater flexibility to their clients to help them tackle the uncertain conditions that are expected to remain until the second half of 2021,” Singh observed.
For 2020 Commercial Office Gross Absorption was down 41% at 34 million square feet while supply was down by only 2% at 38.1 million square feet, according to the Colliers Research report.
The gross absorption during the year that was marked by the pandemic was at a six-year low.
However, demand picked up during the second half of the year as occupiers gained confidence to finalize deals that were stalled during the year and started planning for returning to ‘business as normal scenario’. Gross absorption during the second half of the year rose 25% over the first half of 2020.
Bengaluru accounted for 33% of the gross absorption at about 11.2 million square feet. This was followed by Hyderabad and Delhi NCR with a share of 18% and 17%, respectively.
On the supply front, 2020 saw about 38.1 million sq. feet of supply infusion, a decline of only 2% from 2019, despite a nation-wide lockdown in Q2 2020 hampering construction schedules. #investment #property #construction #economy /fiinews.com
