Net office space leasing up 2% in 2021; still down 45% from 2019 pre-COVID levels: Report

Releasing its quarterly and annual data of India’s office market, JLL India said that the net leasing or absorption for October-December 2021 rose 37 per cent at 11.56 million square feet, the highest in the last eight quarters.

Net office space leasing
Floor space that is pre-committed is not considered to be absorbed until it is physically occupied. (Representational image)

Net leasing of office space across top seven cities grew marginally by 2 per cent last year at 26.17 million square feet, but absorption was 45 per cent lower than record 2019 pre-COVID levels, according to JLL India. The net absorption of office space stood at 25.66 million square feet in 2020 and record 47.8 million square feet in 2019.

Releasing its quarterly and annual data of India’s office market, JLL India said that the net leasing or absorption for October-December 2021 rose 37 per cent at 11.56 million square feet, the highest in the last eight quarters.

According to JLL, the net absorption is calculated as the new floor space occupied less floor space vacated. Floor space that is pre-committed is not considered to be absorbed until it is physically occupied.

During the full-year 2021, IT/ITeS remained the leading occupier category with a 38.9 per cent share of leasing activity, followed by manufacturing/industrial 15.4 per cent and flexible space operators with 11 per cent share.

According to the annual data, the net leasing of office space rose 14 per cent in Bengaluru to 7.82 million square feet in 2021 from 6.83 million square feet in the previous year. Delhi NCR market saw 44 per cent growth in net leasing at 4.72 million square feet last year from 3.27 million square feet in 2020. In Kolkata, the absorption of office space jumped three times to 0.57 million square feet from 0.19 million square feet.

The net leasing in Pune increased 26 per cent to 3.18 million square feet from 2.52 million square feet. However, the absorption fell 10 per cent in Chennai to 2.03 million square feet from 2.27 million square feet.

The net leasing in Hyderabad fell 36 per cent to 4.14 million square feet from 6.48 million square feet. Mumbai also witnessed 10 per cent fall in net leasing at 3.7 million square feet in 2021 from 4.11 million square feet in the previous year.

In 2021, JLL India said the new supply addition went up 23 per cent at 45.67 million square feet from 37.12 million square feet in the previous year. Vacancy of office spaces increased to 15.3 per cent in 2021 from 13.4 per cent in the previous year.

On the outlook, JLL said: “Given the rise in Covid cases as we enter the new year, return to work plans for corporates may see some delay as they keep a close eye on the events unfurling over the first quarter of 2022.” The consultant pointed out that both occupiers and landlords would continue with their cautious approach.

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