Hyderabad: In the second quarter of 2021, the city of Hyderabad outsmarted all other eight metropolitan cities in office space leasing, according to noted consultants in the area Cushman and Wakefield. In a report released on office space leasing market for the second quarter of 2021, the office space leasing activities were active in Hyderabad and Delhi-NCR.
Out of the total pre-leasing activities that had taken place on pan-India level, Hyderabad accounts for one-third of the activities. In the second quarter, compared to the leasing activities that had taken place in the first quarter, only 9.9 million sft office space was leased out. It is 16.9 per cent less compared to the office space given on lease in the first quarter. The leasing activities are likely to pick up in future.
The share of Hyderabad in office space lease is put at 33.6 per cent, improved from the first quarter performance. While Hyderabad improved, Delhi-National Capital Region and Mumbai recorded a slump. Only term renewals were entertained. While the share of Delhi and National Capital Region was only 17.9 per cent, Mumbai and Bengaluru together achieved one-fourth of the total volume of the leasing activities. Under the impact of Covid-19 second wave, only 8 million sft of office space could be built. On an annual basis, 26.4 per cent depreciation was noted. In Hyderabad, only 23.4 per cent of the total office space could be built so far.
• As the government has initiated measures to vaccinate construction workers at work sites, the construction activity will improve during the next 6 to 12 months. The market sentiment is likely to work out favourably. The third wave of the Corona virus is likely to impact the availability of office space. But, there would be no let up in construction activity as the vaccination activity has picked up. If the impact of third wave is not so severe, all construction activity is likely to be completed within the time stipulated.
The market for office space is not likely to be stable in the days to come. However, it is going to better its performance in the country. As the vaccination programme is going on at a brisk pace, on one hand several firms will continue to allow employees to work from home and review the policy and will slowly call them to work from office. The second wave of the Covid was exploited by several major players in the industry to derive long-term benefits. They entered into agreements spanning over several years to expand their activities. The same trend will continue in future too. The MNCs are going to improve their technology outsourcing and R and D activities. In the long run, the market for office leasing in Hyderabad will continue to top the charts.
– Veerababu, MD, Cushman and Wakefield (India)
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