Moneycontrol PRO
Upcoming Event:Attend Algo Convention Live, 2 Days & 12+ Speakers at best offer Rs.999/-, exclusive for Moneycontrol Pro subscribers. Register now!

Ind-Ra revises commercial realty outlook for FY23 to ‘improving’; office leasing to grow at 10%-15% YoY in FY23

The demand will also be driven by strong hiring across sectors like information technology, banking and insurance, telecom, pharma, retail, education, e-commerce, consulting and analytics, manufacturing, research and real estate, it said.

Observing that the impact of the third COVID-19 wave has receded, leading to a noticeable improvement in business sentiments, India Ratings and Research (Ind-Ra) has revised the outlook for the commercial real estate sector (CRE) to improving for FY23 from neutral in FY22, anticipating an improvement in performance.

It has witnessed a pick-up in the new leasing activity for office space from 3QFY22, and expects office leasing to grow at 10%-15% year-on-year (YoY) in FY23. New leasing activity had declined to 25 million square feet (msf) in FY21 from 37 msf in FY20 on account of the remote working regime during the COVID-led crisis. However, leasing activities picked up in FY22 especially 3Q onwards and was at around 28.0 msf (up 12% YoY).

Considering the rapid vaccination drives, leading to relaxing of COVID-19 led restrictions, resumption of offices in the hybrid mode and retail spaces opening steadily, the CRE is poised for a gradual recovery and growth, it said.

Ind-Ra has observed that rentals for office spaces in FY22 remained steady, with the resumption of economic activities post opening up of lockdown. However, the vacancy increased to 15% end-FY21. The vacancy level had been increasing through FY21 till 1QFY22, due to non-renewal of expired leases, voluntary annulments and subdued demand/fresh leasing due to uncertainty on ‘return-to-office’.

Shift in Demand to Grade A Realtors

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

As quality will play a key part for corporates in buying decisions, the absorption of Grade A office space will be higher. Properties which are more tech-ready with digitalisation and modern amenities in response to emerging behavioural patterns and demand for safe spaces will see higher occupancy and demand.

A strong upturn was observed in hiring activity across markets and sectors such as IT/ITES, BFSI, telecom pharma, retail, education, e-commerce, consulting & analytics, manufacturing, research and real estate in January 2022 versus January 2021.

Surge in hiring is a product of the hybrid work culture, which will lead to a subdued demand for office space after the pandemic ends, it said in its analysis.



Download your money calendar for 2022-23 here and keep your dates with your moneybox, investments, taxes

Moneycontrol News
first published: May 9, 2022 07:11 pm
Sections
ISO 27001 - BSI Assurance Mark