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Office space renewals gaining pace post pandemic

October 26, 2021 2456 0 COVID-19 Current Issues Tech for Good

Office space renewals gaining pace post pandemic

The future is hybrid. Office usage patterns will change, and occupiers will become nimble to maximize efficiency. • Fresh leasing post pandemic was at 67 million sq ft, a drop of 45% from pre-pandemic levels. • Occupiers are negotiating and renewing spaces, while postponing fresh leasing decisions. • Bengaluru followed by Mumbai witnessed the highest share of term renewals post pandemic. • Renewals accounted for 23% of the leasing post March 2020, up 8 percentage points from pre-pandemic scenario. • Pune, followed by Hyderabad saw the steepest decline in leasing post pandemic.

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Occupiers are increasingly renewing their office spaces since April 2020 when the pandemic started, as per Colliers’ and Propstack’s joint report “Evolving office space trends in a post pandemic world.” Renewals for office spaces accounted for 23% of the total leasing during the 15-month period starting April 2020. This is up 8 percentage points from the 15-month period pre pandemic till March 2020.

Bengaluru followed by Mumbai witnessed the highest share of term renewals post pandemic. 

"Occupiers are using the current favourable market dynamics to negotiate renewals. They are looking at more flexibility in leases too. Occupiers’ decisions are quicker than last year, with a focus on new-generation offices. Re-entry of employees has started in India, with many companies planning to get back more employees from January 2022. This will prompt occupiers to make leasing decisions quicker,” said Ramesh Nair, Chief Executive Officer | India & Managing Director, Market Development, at Colliers India.

 “Occupiers are gradually getting back to their offices, but high-density office space may be a trend that has peaked. COVID-19 may also accelerate a trend from leasing office space in the CBD to suburbs. Corporates will face a challenge to design and modify existing office space to support a company’s established culture while following the new health protocols & yet promote social interaction & collaboration,” said Raja Seetharaman, Co-founder, Propstack.

Delhi-NCR and Bengaluru most resilient office markets post pandemic.

Delhi NCR and Bengaluru emerged as the most resilient cities in the office markets post pandemic, as per the report. Compared to 15 months pre-pandemic, these two cities saw the lowest decline in leasing in the 15 months post April 2020.

The leasing in Bengaluru was led by the IT sector, followed by the BFSI sector. In Bengaluru, BFSI sector’s share in leasing rose to 12% in the months post pandemic, up 6 percentage points from pre-pandemic levels. In NCR, the IT sector’s leasing improved post pandemic.

Overall, total leasing declined 39% in the 15 months post pandemic. Southern cities accounted for 52% of the leasing post pandemic.

BFSI sector gaining ground

Global and domestic BFSI firms expanded their real estate footprint post pandemic. BFSI firms accounted for 15% of the total share in leasing post pandemic, from 10% share before. Bengaluru, Chennai and Mumbai seeing traction from BFSI companies led by global in-house centers, and insurance firms. Mumbai saw BFSI sector overtaking the IT sector’s leasing post pandemic.

Overall, coworking leasing share fell to 4% as operators avoided speculative development, post pandemic.

For further information, please visit:

https://www.colliers.com/en-in 

https://www.linkedin.com/company/colliers/


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Colliers India
Sukanya Dasgupta, Head Marketing and Communications - sukanya.dasgupta@colliers.com

Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 66 countries, our 18,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 28 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of approximately 20% for shareholders. With annual revenues of $4.5 billion and $98 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors, and our people. Learn more at corporate.colliers.com, Twitter @Colliers or LinkedIn.



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