According to JLL India, a company that provides real estate and investment management services, the total amount of office space leased out in January across seven major cities increased by 93 percent compared to the same month in the previous year. This increase in leasing activity amounted to a total of 3.2 million square feet of office space.
The office space in question includes all grades of buildings, which means it encompasses different levels of quality and amenities. This data indicates that demand for office space in these seven cities has significantly increased in a short period.
In January 2023, there was a significant drop in leasing activity, with only 1.7 million square feet of office space being leased. This was a 56% decrease from December 2022, which had seen a much higher absorption rate of 7.4 million square feet.
The term “aggregate office market leasing activities” pertains to the transactions involving all grades or types of office buildings in the seven major cities of India, namely Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, and Kolkata. This data comprises pre-commitments and term renewals that have been confirmed, while any deals that are still under negotiation are not considered in the analysis.
According to JLL India, a real estate services company, the majority of recorded transactions in the past month were related to new leasing, which encompassed the uptake of space for expansion or relocation purposes. This type of leasing accounted for 87 percent of all transactions that were recorded.
JLL India noted that January is generally considered a sluggish period, as many global corporations take time off for the holiday season and prioritize future business planning. During this time, most deals that were delayed due to certain reasons are typically finalized.
According to JLL, in January 2023, the three cities that had the highest leasing activity were Delhi NCR, Chennai, and Mumbai, in that order. These three cities accounted for 77 percent of all monthly leasing activity.
JLL’s Chief Economist and Head of Research in India, Samantak Das, stated that the IT sector is currently experiencing slower employment and expectations of sluggish corporate growth. As a result, there may be a more moderate uptake of office spaces as a part of a corrective measure
According to Samantak Das, Chief Economist and Head of Research, India at JLL, with the changing global economic landscape, it is expected that other occupier categories will maintain a stable state, but with a slight downward trend in the short term.
The data reveals that, in January, the IT/ITeS category continued to be the primary driver of overall market activity, representing 28 percent of the total market activity.
JLL’s data indicates that as of the end of March 2022, India’s Grade A office stock, which refers to premium quality office spaces, was approximately 732 million square feet.
In addition to the Grade A stock, there were other grades of office spaces that accounted for 370 million square feet, resulting in a total office stock of about 1.1 billion square feet.
