Sluggish demand has been seen in the real sector, especially in the corporate sector. The figures for the first quarter of the current calendar year are indicating something. According to JLL India, the office market of Delhi-NCR has remained sluggish during January-March. Net leasing of workspace fell 60 percent to 1.5 million square feet due to reduced new supply. Data from real estate consultant JLL India showed that gross leasing of office space in Delhi-NCR fell 28 per cent to 3 million sq ft in January-March from 4.2 million sq ft in the same period last year.
Net leasing of office space fell 60 percent to 1.5 million square feet, from 3.7 million square feet earlier. Gross leasing refers to all lease transactions recorded during the period, including firm pre-commitments. This does not include lease renewals. Net absorption is calculated as follows: Occupied new floor space – Occupied floor space vacated. Floor space that has already been committed is not considered absorbed until it is actually occupied.
JLL India said that the new supply of office space during January-March was 1.39 million square feet, which was 2.9 million square feet in the same period last year. JLL said the long-term fundamentals of the Delhi-NCR office market remain strong, and leasing activity is expected to accelerate in the coming quarters. Real estate major DLF has a huge portfolio of office properties in Delhi-NCR. Bharti Realty and Max Estates are also big players in the office market of NCR.
Recently, Signature Global has formed a joint venture with RMZ Group to develop a commercial project in Gurugram, in which a total investment of about Rs 7,500 crore will be made. The project will have a leasable area of 55 lakh square feet, of which approximately 35 million square feet will be prime office space, and the remaining area will be for retail space and two hotels with approximately 500 rooms each. Gorse Group also plans to develop office space in Noida.
Across seven major cities, gross leasing of office space rose 10 per cent to 21.5 million sq ft in January-March from 19.5 million sq ft in the same period last year. Net absorption or leasing of office space increased by 7 percent to 13.7 million sq ft from 12.8 million sq ft. The seven big cities include Mumbai, Bengaluru, Delhi-NCR, Pune, Hyderabad, Chennai and Kolkata. The increase in gross leasing in these seven big cities was due to foreign companies looking to take up workspace to create Global Capability Centers (GCCs).
Rahul Arora, Head – Office Leasing and Retail Services, Senior Managing Director (Karnataka, Kerala), JLL India, said the market fundamentals continue to strengthen, and vacancy across India has declined to a five-year low of 14.7 per cent. The consultant said that he sees India changing from a 'cost centre' to a 'centre of innovation', with Bengaluru at the forefront of this growth that has been going on for many years.
Vibhor Jain, Founder and CEO of Carbon Guardians, said that we believe that India's office market is going through a real structural change, this is not just another cycle. Demand remains strong, but we also have to be realistic. Prolonged geopolitical tensions could drive up energy, logistics and fit-out costs, even if the world eventually learns to adapt. Also, he said that AI is reshaping the traditional IT services model, and this is having a direct impact on the demand for office space based on the number of employees in India. Jain said that now the opportunity is to create the right quality workplace for the more selective and changing users.
