Office leasing activity for November 2022 jumped 59.5 per cent year-on-year to 5.8 million sq ft, according to a report by real estate consultant JLL. However, the office leasing activity in November was down 13.4 per cent on a month-on-month. Fresh leasing with expansion and relocation transactions dominated the bulk of occupier activity in November.
Total leasing activity for six months during June-November 2022 jumped 25.2 per cent compared to the corresponding period a year ago, said JLL. Bengaluru, Mumbai, and Chennai were the top-three cities, with nearly 77 per cent of overall monthly leasing activity in November. Mumbai continued to account for the maximum number of deals, followed by Chennai.
Samantak Das, chief economist and head (research) and REIS, India, JLL, said, “As we approach the end of the year, monthly aggregate leasing activity declined month on month in November 2022, as occupiers have turned slightly cautious in the current environment. Global headwinds are creating an environment of uncertainty for business growth projections which is impacting real estate decision-making.”
He added that slower tech hiring activity and direction from global HQs are expected to cause a temporary disruption for one-two quarters till the headwinds ease off even as India’s position as the back office and R&D hub for the world is likely to remain intact.
According to the JLL report, the IT/ITeS segment reclaimed its place as the biggest driver of aggregate market activity in November 2022 with a 23 per cent share.
“This is the highest in three months, albeit it can be explained by transaction closures back-ended as we approach the year-end with a couple of pre-commitments supporting the increase,” the report said.
Both consultancies and BFSIs showed a slight decline in their respective shares on an m-o-m basis. Flex remained a key occupier segment and saw its share rise to 12 per cent. The manufacturing/ industrial segment also remained robust, although its share declined on an m-o-m basis.
The report said global headwinds are slowing down occupier market activity amid delayed decision-making as occupiers keep an eye on the evolving macroeconomic environment and its resultant impact on business growth.
“While overall market activity remains much better in 2022 compared to the previous two COVID-impacted years and expect slower tech hiring activity and direction from global HQs on business projections may keep occupiers more cautious in the short-term. India’s position as the back-office of the world is likely to remain intact and this should be nothing more than a temporary disruption till the headwinds turn more benign,” it added.
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