As the lockdown restrictions eased after the second Covid-19 wave in India, offices began to re-open across cities.
The outlook for office market space in the commercial real estate segment has improved for the second quarter of this year when compared to the earlier months. According to the Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index for April to June, 2021, the stakeholder outlook has improved for the parameters of leasing and rents in Q2 2021. As the lockdown restrictions eased after the second Covid-19 wave in India, offices began to re-open across cities. Buoyed by the lifting of lockdowns as well as relaxations in mobility restrictions since June, stakeholders are now expecting a pick-up in office market activity in the next six months.
The survey data has shown that on the demand front, 40 per cent of the survey respondents are expecting office space leasing to increase in the next six months. “In terms of supply, 69 per cent of the Q2 2021 survey respondents –marginally down from 70 per cent in Q1 2021 are of the opinion that new office supply will either increase or remain the same over the next six months,” the survey report said.
As many as 21 per cent survey respondents believe that during the second half of this year, the office rents can also increase or remain stable. Reduction in office space rents is unlikely now for this year.
Niranjan Hiranandani, National President, NAREDCO and MD, Hiranandani Group said, “Outlook for the commercial office market has also been progressive in Q2 2021, for both, leasing, and rentals. The demand for office or dispersed commercial portfolios will expand on the back of consolidation trend and expansion of satellite offices following the hub and spoke model.”
He added that the remote work near home trend will give fillip to new commercial development in suburban business districts as the city of Mumbai witnesses linear growth towards the rise of suburbia. Therefore, the next few quarters are likely to see some alignment to the new normal work trend shaping up in the work-sphere.