The first half of 2021 was shaped by the second wave of the pandemic, contrary to the optimism of the first few weeks, said Arvind Nandan, managing director (research and advice) of Savills India. “However, despite the market slowdown in the second quarter and a notable annual decline, we believe the second half of the year may show some improvement, as vaccinations resume and occupant confidence returns.”
Increase in new completions
New completions edged up 4% year-on-year to around 18.0 million square feet, with Bengaluru, Hyderabad, Mumbai and Pune seeing an increase in new completions compared to the same period last year, the deferred supply having been completed.
“Bangalore saw the strongest injection of new offerings, with a 36% share, followed by Hyderabad and Delhi NCR at 28% and 22% respectively,” he said.
Vacant jobs
Overall vacancy levels rose to 16.2% at the end of June as the increase in supply outpaced the pace of rental activity, the report said.
“In addition, some occupants have optimized their real estate portfolios to make them an efficient space, driving up vacancy rates in some markets,” said Savills India. “It should be noted that this may be a temporary phenomenon in rapidly changing markets.”
Big business continues
Significant consolidations and expansions contributed to the share of large deals – exceeding 100,000 square feet – in the first half of 2021, accounting for around 43.2% of the overall pie, while leasing of mid-size occupants amounted to 27.7%, according to the report.
Bangalore recorded the highest share of large transactions at 51%, followed by Delhi-NCR and Hyderabad.
The report says small occupants, with spaces under 25,000 square feet, continued to optimize their portfolios, resulting in a 27.7% share of total office leases during the period. considered.
