Select big-ticket transactions in Gurugram and Noida areas contributed considerably to the leasing exercise. There have been few relocations by occupiers in a bid to scale back actual property value and acquire recent office areas on engaging lease phrases. IT/ITES, BFSI, Healthcare, authorized and consulting corporations dominated leasing through the quarter.
“Delhi NCR continues to be a vibrant location for the office market with well-established submarkets and corridors. While Gurgaon and Noida have taken the lead in terms of development and infrastructure, the city itself continues to remain a highly preferred location. In total, eight projects totaling 4 million sq. ft were added to the stock which stood at 129 million sq. ft at the end of the quarter,” stated Manish Aggarwal, MD, Delhi NCR, JLL India.
The emptiness fee stood at 29.3% as on the finish of quarter, growing by 140 bps over the earlier quarter. Vacancy ranges rose in choose outstanding prime enterprise districts the place occupiers both downsized present occupancies or shifted to places with comparatively decrease rents.
“NCR office market remains one of healthy commercial office space take-up and strong demand from IT/ITES, BFSI and law firms has fueled the growth momentum thereby showing strong commercial growth in the capital city,” he added.
Rents remained secure with builders providing elevated rent-free intervals on a case-by-case foundation. It is predicted that rents will proceed to stay rangebound in the short-term as leasing momentum in the following few quarters will primarily hinge on the containment of the second wave of COVID-19 instances.
“We have been seeing strong momentum in Noida and both the office space and residential market is growing since the onset of pandemic. Increase in office space leasing, will fuel the demand for residential market and already, developers are back with offers to attract customers,” stated actual property consultancy Investors Clinic’s company director Sachin Arora.
The general office market in India witnessed a web absorption lower of 33% in Q1 2021 quarter-on-quarter (Q-o-Q), with 5.53 million sq. ft leased throughout Jan to March 2021. On a year-on-year (Y-o-Y) foundation, web absorption in Q1 2021 stands at 64% of the degrees witnessed in Q1 2020.
Bengaluru, Hyderabad and Delhi NCR accounted for practically 80% of the web absorption through the quarter. Moreover, Bengaluru and Delhi NCR have been the 2 markets which witnessed a rise in web absorption when in comparison with This autumn 2020.
“While 2020 ended on a relatively high note, there was still uncertainty in the market with respect to resumption of business as usual. Occupiers continued to adopt a cautious approach and focused on reassessing their real estate portfolios and long-term commitments. To add to the woes, increasing fears of a spike in COVID-19 cases in the second half of March further pushed the occupiers to press pause again and postpone their real estate decisions,” stated Samantak Das, Chief Economist and Head of Research & REIS, India, JLL.
Pre-commitments in new completions performed a big function in driving web absorption. In the primary quarter, 31% of the brand new completions through the quarter was already pre-committed. Maximum pre-commitment ranges have been noticed in the southern markets of Bengaluru (51% of the brand new completions) and Hyderabad (45% of the brand new completions).
At the identical time, it is very important notice that the leasing momentum in some of the bigger markets have remained promising in the primary quarter of 2021. The quarter witnessed gross leasing volumes of 7.5 million sq. ft throughout the highest seven markets. Interestingly, the bigger market of Mumbai noticed an enormous bounce in leasing quantity from 0.5 million sq. ft in This autumn 2020 to 1.6 million sq. ft in Q1 2021. This was majorly pushed by choose massive pre-commitment offers in upcoming areas inside the BFSI space. Further, Delhi NCR noticed a marginal improve in leasing volumes from 1.9 million sq. ft in This autumn 2020 to 2 million sq. ft in Q1 2021.
Office rents in Q1 2021 remained secure throughout the key office markets in India. With emptiness ranges nonetheless beneath 15% and restricted upcoming Grade A provide throughout key markets in the following few years, the office market in India continues to be tilted in direction of landlords. Hence, discount of headline rents shouldn’t be a well-liked phenomenon and rents are anticipated to stay vary certain in the brief to medium time period.