Office leasing sees growth in 2021, vacancies to rise: Sevilles

Bengaluru has led the leasing momentum, registering 12 million sq ft absorption for the year, followed by the National Capital Region (NCR), which has seen 7.8 million sq ft office absorption. Hyderabad witnessed 5.7 million sq ft of leasing, while Mumbai had an office space absorption of 4.6 million sq ft.

However, the overall vacancy level on an all-India scale increased by 6%, as a result of supply infusion, to 17.7% in 2021. The change in rental value in micro-markets varies within each city, with an average drop of around 5-7. % year-over-year in most markets. However, top-end fares remained strong in each market and even registered small-scale growth.

“While the second wave of the pandemic slowed activity in parts of 2021, a strong rebound in the second half of the year has shown the underlying strength of demand indicating a comparatively better performance. Anurag Mathur, CEO, Sevilles India said, “The leasing and supply activity numbers in top cities of the country reflect the depth of growth opportunities and the long-term potential of the Indian office market.

The second half of 2021 witnessed significant growth, registering a leasing high of 13.7 million sq ft in the July-September period, which is more than double the average absorption of the preceding five quarters from Q2-2021 to Q2-2021, which is 6.8 million square feet. million square feet.

“While one could argue that the emergence of a new version of the virus has once again emphasized the need to be prepared for the force majeure, the caution being exercised at various levels does not give any heed to the real estate market. Appropriate impact can be prevented. 2022,” Mathur said.

While the information technology (IT) sector continues to drive the office market, the return of co-working was a remarkable 13%, with a 49.2% share of total leasing in 2021, Saviles said. Banking, financial services and insurance (BFSI) maintained a 15.2% share, an increase of around 3% from 2020. Engineering and manufacturing saw a share of around 7.2% of demand in 2021.

“As in 2020, IT continues to be the major driver of the office market in India. Co-working spaces have revamped their offerings and repositioned themselves to suit the needs of the occupants. Sectors like BFSI, co-working, real estate have increased their share of the pie, which is expected to give the Indian office market space a second wave and strengthen in 2022″ Arvind Nandan, MD, Research & Development Consultation said, Sevilles India.