Office space leasing may fall 46% to 25 million sq ft this year; demand to recover in 2021

Net leasing of office space is estimated to fall 46 percent to 25 million sq ft across seven major cities on lower demand from corporates and co-working players due to COVID-19 pandemic, according to industry experts. However, the absorption of office space in 2021 is likely to surpass an average leasing of 31 million sq ft during last ten years, top property consultants said in a webinar organised by Workplace Trends India founder Tushar Mittal.

Anarock Chairman Anuj Puri said the net absorption is estimated at around 25 million sq ft this calendar year. Puri said he was surprised with revival in office leasing activities and had earlier expected the absorption numbers to be less than 20 million sq ft.

JLL India Country Head and CEO Ramesh Nair said the net office space leasing declined to around 17 million sq ft during January-September from about 32 million sq ft in the corresponding period of the previous year. "We expect absorption to be 25-27 million sq ft this year," he added.

The consultant tracks seven cities — Delhi-NCR, Mumbai, Kolkata, Chennai, Pune, Hyderabad and Bengaluru. Nair said 2019 was an extraordinary year when net leasing hit record 46.5 million sq ft.

However, he said the average leasing of last year has been 31 million sq ft and expected that demand would cross this number in 2021. Anshul Jain, Managing Director, South East Asia and India, C&W, said the gross absorption presents a better picture and will be down around 35 percent this year.

JLL and Cushman & Wakefield are leading property consultants globally. Home-grown Anarock is one of the leading housing brokerage firms in India and has now expanded into consultancy services in warehousing, data centre and retail segments. It also sells office properties but is not present in leasing business yet. Tushar Mittal is founder and MD of Gurugram-based interior design firm SKV.