As corporate houses and coworking companies continue to postpone their expansion plans due to COVID-19 crisis, net leasing of office space fell 50 per cent across seven metropolitan cities - Delhi-NCR, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru and Pune - to 5.4 million square feet in the September 2020 quarter. In September 2019, the net absorption of office space was 10.9 million square feet in these 7 major cities.
Net office leasing tumbled by almost 47 per cent from 32.7 million square feet to 17.3 million square feet in the January-September period. However, India's office market witnessed an increase of 64 percent in Q3 versus Q2. "India's office market witnessed a net absorption of 5.4 million sq ft in quarter ending September 2020 (Q3), an increase of 64 per cent versus quarter ending June 2020 (Q2)," JLL India's official statement read.
During July-September 2020, Bengaluru topped with net leasing of 2.72 million square feet, followed closely by Hyderabad at 1.54 square feet. Leasing of office space stood at 0.46 million square feet in Pune, 0.28 million square feet in Mumbai, 0.21 million square feet in Chennai, 0.2 million square feet in Delhi-NCR and 0.02 million square feet in Kolkata.
Apart from Silicon Valley of India, which saw a very minor uptick in office rents, office rents in June as well as the September quarters remained stable across all markets under review.
The COVID-19 crisis has impacted the demand for office spaces as corporate houses are treading a cautious path and delaying expansion plans. The remote working model or Work from Home policy adopted by several companies has also contributed to the nosedive in demand for office spaces.