Rentals in India’s prime workplace markets — Bengaluru, NCR and Mumbai markets are anticipated to stay steady more than the next 12-months.
Knight Frank in its newest report Asia-Pacific prime workplace rental index for the 1st quarter of 2021 cited that in spite of there becoming uncertainty about the efficiency of India’s workplace sector, Bengaluru, NCR and Mumbai markets are anticipated to stay steady.
According to the report, Bandra Kurla Complex (BKC) in Mumbai witnessed a recovery in workplace rents, which had been down .8% sequentially in the course of the January – March 2021 quarter, compared to a decline of 5.5% in the earlier quarter. This robust recovery can be attributed to enhanced transaction activity in the Q12021 period.
Central Business District (CBD) of Bengaluru, comprising regions such as MG Road, Infantry Road, and Residency Road, has registered a decline of 3% quarter-on-quarter (q-o-q) against a decline of 4% in the October-December period. The rents in workplace spaces at Connaught Place in Delhi remained flat compared to a fall of 1% in Q42020.
Knight Frank forecasts that the decline in rents to decelerate this year, with all round rents anticipated to decline by 3% in the APAC area, compared to the 4.8% decline seen in 2020.
Shishir Baijal, chairman and managing director, Knight Frank India mentioned, “The second wave of pandemic and associated regional lockdowns have temporarily delayed occupiers’ office re-occupancy plans. However, control on infection case count with graded regional lockdowns and progress on vaccination drive will act as a market stabiliser in near future. Given the strong fundamentals of India office market, despite the near-term uncertainty, occupiers will positively react to any improvement in the pandemic scenario in the country”.
Meanwhile, a further home consultant, ANAROCK Property Consultants mentioned on Tuesday that the second wave in India is far more excruciating than the 1st, pushing some firms into a wait-and-watch mode once again with their genuine estate choices. In a sign that leasing activity is slowing down, the typical vacancy levels in Grade A workplace space across the prime seven cities has risen, breaching the 15% mark. Rising Covid-19 circumstances in cities like MMR and Bengaluru — the markets with the highest industrial demand – and stringent curfew restrictions are bring about for concern.
The developers are anticipated to face a hard challenge leasing out workplace properties with more than 7,400 leases spanning roughly 90 million square feet region coming up for renewal in 2021 across the prime six industrial genuine estate hubs – Bengaluru, Mumbai, Pune, Chennai, Gurugram and Noida.
The year 2021 also has the highest lease expiry pipeline when compared to 2022 and 2023. The year 2022 will see almost 7,000 leases for about 78 million sq. ft. come up for renewal, and about 4,200 leases for more than 55 million sq ft in 2023.