Notwithstanding the COVID-19 pandemic, the subsequent lockdown, focus on work-from-home due to social distancing norms and not to mention office occupiers deciding to reassess their office expansion plans, as much as 17.38 million sq ft of commercial space was leased between April to September 2020 of which the IT/ITeS sector alone took up a lion’s share of 7.72 mn sq ft, according to data tracked by PropEquity, a real estate data and analytics platform.
The country’s IT hub Bengaluru continued to forge ahead in terms of commercial leasing with a contribution of 5.16 m sq ft out of the total of 7.72 mn sq ft taken up by IT/ITES segment across the country, PropEquity data said.
Among the other sectors, the financial or the BFSI sector took up 2.84 mn sq ft of space; research and consulting took up 2.24 mn sq ft; engineering and manufacturing took up 1.01 mn sq ft; co-working leased about 0.45 mn sq ft and other services took up around 3.12 mn sq ft, it said.
This data is based on the 430 registered documents tracked by PropEquity across Bengaluru, Mumbai, Gurgaon, Noida, Chennai, Pune and Hyderabad.
The total area taken up by office occupiers in Bengaluru alone is 192 mn sq ft. The total occupancy by Gurgaon so far is 67 mn sq ft and Noida takes up about 30 mn sq ft of commercial space.
“Bengaluru occupies almost three times the size of commercial space occupied by companies in Gurgaon. Noida on the other hand takes up less than half the space in Gurgaon,” Samir Jasuja, founder of PropEquity told Moneycontrol.
About 61 mn sq ft of commercial space is due for renewal during April to December 2020 of which 35 mn sq ft is expected to be renewed by December 2020, the report said.
“We anticipate that the IT sector alone would comprise about 25 mn sq ft of the total renewals by the end of the year,” he said.
Of the total 17.38 mn sq ft commercial space taken up by different sectors, as much as 7.55 mn sq ft comprises new leases; 1.63 mn sq ft accounts for pre-leased transactions where the buildings are in various stages of construction and 8.20 mn sq ft consists of renewals.
The total commercial space leased by the IT/ITeS sector is 7.72 mn sq ft. This include 2.69 mn sq ft of new leases, 1.39 mn sq ft of pre leases and 3.65 mn sq ft of renewals.
“This would have been 60 mn sq ft in 2019 before the pandemic stuck,” explains Jasuja.
“Total commercial space take up by the end of the year is expected to touch 35 mn sq ft which was around 60 mn sq ft last year of which 40 mn sq ft was taken up by the IT/ITeS sector alone last year,” he said.
“Due to the pandemic we have so far been able to absorb just about half of the total space take up last year,” he added.
The report also noted that the average lease tenure of most commercial spaces is 62 months.
As far as average rentals are concerned, IT/ITeS sector commanded a weighted average rental of Rs 69 per sq ft, research and consulting was Rs 84 per sq ft, financial services was Rs 54 per sq ft, engineering and manufacturing was Rs 90 per sq ft, co-working was Rs 92 per sq ft, the report said.
PropEquity covers over 1.6 billion sq ft of ready and under construction space occupied by commercial offices, IT SEZ, retail and augmented with over 100,000 lease and sale transactions in addition to over 1,18,000 residential projects of over 30,000 developers across over 44 cities in India.