With 7,400 Leases Up for Renewal, it may be a Bad Year for Office Providers

Office spaces across India are expected to face a major test in terms of occupancy in the year 2021 with a large number of commercial space leases set for their renewal this year in the backdrop of Covid-19 pandemic and emergence of hybrid work model.

The comforting factor among key variables that would dictate absorption levels is that information technology firms, which usually lead the demand, continue to hire in bulk.
Over 7,400 leases spanning around 90 million sq ft office space will come up for renewal this year across the top commercial real estate hubs including Mumbai, Bangalore, National Capital Region, Pune and Chennai, shows data from Anarock Research.

“The office market has been under strain since the pandemic came in. However, the IT/ITeS sectors have been on a hiring spree in 2020 and 2021 due to massive business accruals. To accommodate these employees in a future when we see a gradual return of employees and adoption of hybrid workplace practices by Infotech giants, office space demand will grow,” said Prashant Thakur, Director & Head-Research, Anarock Property Consultants.
According to him, office demand is also expected to gather momentum from 2022 in the wake of robust hiring by large corporates. These big corporates will definitely renew their leases, though some of the smaller companies may consider rationalizing space.S-ET

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