Office rentals in 2021 could remain stable or increase slightly in 7 cities: JLL


New Delhi, June 15 (PTI) Net office leasing in seven major cities is expected to remain stable or may increase slightly from 25.6 million square feet achieved in 2020 as companies have not abandoned their plans to expansion amid second wave of COVID-19, according to senior JLL India official.

In an interview with PTI, Rahul Arora, Head of Office Leasing Consulting, JLL India, said that the year 2021 has started on a good note with a net absorption of 5.5 million square feet of office space. in seven cities – Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Kolkata – during the January to March quarter.

However, he said, rental dynamics have been affected in the second quarter of the current calendar year due to the second wave of COVID-19.

Regarding the net rental outlook for 2021, Arora said: “We expect absorption to remain similar to 2020 or maybe better in case we don’t face another foreclosure in H2 of the year.”

Net absorption fell sharply to 25.6 million square feet in 2020, from a record 46.5 million square feet the year before due to the pandemic.

“In summary, office rental showed good resilience in 2020 and was back by almost 55% from 2019 – which was a bumper year for the rental market,” said Arora.

He pointed out that the year 2021 has started on a very strong note, with over 15 million square feet of space required through tenders (tenders sent by occupant companies to developers) .

“Even though the first quarter of 2021 saw a strong absorption of almost 5.5 million square feet, there was an immediate impact of Lockdown 2.0. However, the silver lining for the industry was the fact that companies did not put aside but simply delayed these requirements.

“As we approach reopening 2.0 across the country, we have several clients inquiring about various opportunities, considering flex vs. permanent, furnished vs. unfinished,” he said.

Arora said the occupying companies are taking various measures to ensure that the eventual return to the office is safe, sustainable and productive.

“Everyone is concerned about the well-being of their employees and so we have seen several extremely successful vaccination campaigns for all employees and their families. While WFH (Work From Home) will continue for a while, perhaps until most are vaccinated, the market will witness hybrid workplace strategies in the coming months, ”he said. observed.

From an office rental perspective, Arora said it was evident that companies did not intend to implement WFH due to various challenges.

“The tech giants keep hiring. We expect a more targeted hybrid return-to-work approach – some near drop-in centers, as well as the main office with only a fraction of people allowed to visit the offices.

“Flexible space is expected to experience increased demand in the short term. We expect a larger workforce to return to work in 2022 (only after vaccinations), ”he said.

The consultant said the supply of new office space has been affected due to the unavailability of manpower and lack of funds.

Arora said rentals are expected to remain stable in key micro-markets.

JLL India, part of US-based real estate consultancy JLL, is one of the leading real estate consultants in India, dominating the business of commercial leasing and facility management.

JLL India’s revenue was around Rs 4,000 crore in 2018-19. 2019-20 and 2020-21 sales figures were not disclosed. PTI MJH BAL

Warning :- This story has not been edited by Outlook staff and is auto-generated from news agency feeds. Source: PTI

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