·       Technology led leasing during Q1 2024 at 23% share, followed by Engineering & manufacturing at 21% share

·       Vacancy levels remained rangebound; rentals rose up-to 8% YoY across major markets

The first quarter of 2024 has started on a strong note, registering total leasing of 13.6 million square feet across the top 6 cities, marking a remarkable 35% increase compared to the same period last year. Although this is a significant drop from the record office space take-up in the last quarter of 2023, the remarkable annual increase is indicative of upbeat occupier sentiment, given the fact that the first quarter is typically slower. Bengaluru and Hyderabad emerged as frontrunners for demand of Grade A office space in Q1 2024, cumulatively accounting for more than half of the India leasing activity. The office market of Hyderabad especially demonstrated a strong momentum with 2.2x space uptake in Q1 2024 as compared to the corresponding quarter last year. This demand was driven by Healthcare & Pharma and Technology sectors. Amongst other major office markets, Mumbai too experienced a notable surge in leasing activity, an impressive 90% YoY rise in Q1 2024.

“Hyderabad continues to strengthen its role as a prominent commercial office market in the country. The city offers occupiers including Global Capability Centers considerable price arbitrage compared to other markets. Furthermore, proactive government policies, continuous infrastructure upgrades and a favorable business ecosystem makes Hyderabad a compelling destination for investors, occupiers, and leading developers of commercial real estate in India. Within Hyderabad, the trifecta of Hi-Tec City, Gachibowli and Madhapur continued to drive leasing activity in Q1 2024. Of the 2.9 million square feet of Grade A space uptake in the first quarter, over 80% of the demand was concentrated in these three localities.” says Arpit Mehrotra, Managing Director, Office services, India, Colliers.

Trends in Grade A gross absorption (in million sq feet)

Source: Colliers

Note- Q1: 1^st January to 30^th March of the year

Gross absorption: does not include lease renewals, pre-commitments and deals where only a letter of Intent has been signed.

Top 6 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune

During Q1 2024, new supply across top 6 cities remained steady, at 9.8 million square feet, almost at par with the level seen in Q1 2023.  Bengaluru witnessed significant new project completions, contributing to 45% of the total new supply, followed by Hyderabad at 27% share. With demand outpacing supply, average rentals saw up to 8% uptick on a YoY basis across most of the major markets. Vacancy levels, meanwhile, are expected to remain steady, hovering around 17.3% by the end of Q1 2024.

Trends in Grade A new supply (in million sq feet)

Source: Colliers

Note- Q1: 1^st January to 30^th March of the year

Top 6 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune

Technology, Engineering & Manufacturing and BFSI sectors drove space uptake in Q1 2024

“Driven by strong domestic occupier activity across Technology and Engineering & manufacturing sectors, the first quarter of 2024 signals a strong start for India’s office market. During Q1, occupiers from Technology, Engineering & Manufacturing, and BFSI sectors collectively accounted for 58% of total leasing activity across the top 6 cities. This momentum, coupled with the resurgence in GCC demand, sets the stage for the rest of the year. Healthy demand supply dynamics are likely to prevail throughout 2024. As business sentiments and economic outlook remains positive, domestic occupiers, especially will continue to drive the office market of the country.” says Vimal Nadar, Senior Director and Head of Research, Colliers India.

During Q1 2024, the demand for office space across the top 6 cities continued to remain broad-based. At 2.8 million square feet, Engineering & manufacturing leasing soared to over 2.3x times in Q1 2024 compared to the first quarter of 2023. Bengaluru accounted for about 55% of the activity in the sector, underscoring occupiers’ continued preference for the market. BFSI and Flex space too continued their healthy space take up across most cities, garnering 14% and 13% share, respectively in overall India leasing for Q1 2024.

Sector-wise Pan India leasing (in msf)

Source: Colliers

Note: Others includes Logistics, Media & Telecom etc.

Data pertains to Grade A only

Key deals Q1 2024 Hyderabad

Source: Colliers

Also Read: Leasing demand for manufacturing space surge, expected to reach ~16 million sq. ft by 2024 

The post Office leasing surges by 35% appeared first on Square Feat India.

However, widespread adoption is still a long way, and this can be attributed to the lack of industry-wide guidance, transparency, legal complexities, and split incentives. While the beginnings of change are already evident, India still has a long road to travel on the green lease continuum.

Global occupiers lead the way in sustainable practices

Global occupiers and institutional landlords are at the forefront of sustainable practices, with GCCs accounting for over three fourth of the overall green leasing activity in India. Moreover, it comes as no surprise that the two largest GCC markets of Hyderabad and Bengaluru lead the adoption of green leasing practices, accounting for 64% of the overall green leasing in India.

Waste management, energy efficiency and data sharing are key aspects

Green leasing clauses mainly focus on waste management, energy efficiency and data sharing aspects, with waste management and recycling obligations finding their way into most green lease agreements and some standard lease agreements as well. Energy efficiency is an important instrument towards reducing a building’s carbon footprint and hence, multiple clauses are centred around it.

“Sustainability has now firmly been incorporated into the board room agenda. Various strategies are being devised to reduce carbon emissions from the built environment, and green building certifications and green leases play a crucial role in this endeavor. The Indian market is making significant strides towards sustainability and the increase in green-certified office penetration from 39% in 2020 to 53% in 2023, is a clear indication of this progress. However, environmental performance results will still be lackluster if the building is not operated efficiently. Given the important role of occupiers in ensuring operational efficiency, moving from ‘traditional leases’ to ‘collaboration based green leases’ that enable data sharing and active collaboration between building owners and occupiers, is the need of the hour”, said Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.

“The office segment saw the last two decades focus on Green Buildings. We believe this contributed to India reducing its GDP emission intensity by 33 percent between 2005 and 2019, achieving the target 11 years in advance. Next target is to reduce GDP emissions by 45% by 2030 and achieve net zero emissions by 2070. The realty sector will play a key role in this mission and The next two decades are going to see the focus move to Green Leasing. Green leases, accounting for around 15% of overall leasing today, are bound to reach around 15-20% penetration within the next 1-2 years. As both parties, landlords, and occupiers realize the benefits of green leasing, we believe a significant rental arbitrage to the tune of 10-15% will soon be visible between green and non-green leases”, said Abhishek Kiran Gupta, CEO & Co-founder, CRE Matrix.

Outlook

Looking ahead, green building certification will become a de-facto requirement for prominent occupiers in their selection of office spaces. As occupiers integrate environmental, social, and governance (ESG) factors and net zero carbon (NZC) targets into their decision-making, the green lease contract will play a crucial role. It will go beyond basic energy conservation ambitions to include clauses related to social value and good governance. Occupiers and landlords will engage in active mission-aligned collaboration throughout the life of the lease with measurable goals and corresponding KPIs to ensure desired outcomes. Importantly, a building’s value will increasingly rely on its environmental performance, and collaborative green leases will be a critical part of asset management strategies.

Also Read: Godrej Properties sells over 600 homes worth INR 2,600 crore at the launch of its project Godrej Aristocrat in Gurugram

The post Green Leasing Flourishes in Real Estate Industry, Quadrupling its Share in the<br>Post-COVID Era: appeared first on Square Feat India.

·       Share of BFSI in total leasing rose back to 15% in H1 2023 led by higher domestic demand.

·       Mumbai led the leasing at 31% share, followed by Bengaluru at 24% share.

Foundational shifts across the banking and finance sector are presently underway, with a transformative focus on digital, workforce and Environment, Social and Governance (ESG) priorities, according to Colliers. Having invested significantly in technology, people and workplaces, banking and finance companies today find themselves at an inflection point, Colliers experts have highlighted.

Today, as banks and financial services firms rethink their future with Artificial Intelligence and next-gen technologies, integrating a diverse workforce with new ways of working, real estate plays a massive role in influencing positive business outcomes. It holds the key to powering the industry’s digital, workforce and ESG goals.

Colliers has found physical offices have a profound impact: particularly on an organisation’s digital transformation journey.

“After a lull of 2 years, leasing by Banking, Financial services and Insurance (BFSI) sector made a major comeback and grew more than two-fold at 6.8 million sq feet in 2022. This strong streak continued in the first half of 2023 with BFSI occupiers’ leasing at 3.6 million sq feet, rising 14% annually, demonstrating a healthy outlook for the sector in 2023. A greater focus on return to office coupled with improved domestic financial sector outlook will further support in healthy space uptake in the short to medium term.“ said Peush Jain, Managing Director, Office services, Colliers India.

BFSI sector has seen a steady rise in demand in the last 2 years, with its share in total leasing regaining to 15% in H1 2023 from the pandemic lows.  The resurgence in demand is fuelled by a healthy space take up by domestic & select global banks & financial institutions, supported by a higher rate of return to office. Domestic banks, insurance companies and financial institutions have witnessed an uptick in demand backed by improved economic outlook and heightened domestic demand.

Interestingly, majority of the large BFSI occupiers continue to prefer conventional office spaces & work mechanisms to suit their operational & technical requirements, keeping the demand for real estate space buoyant.

Source: Colliers

Note- Data pertains to Grade A buildings

Gross absorption: does not include lease renewals, pre-commitments and deals where only a letter of Intent has been signed.

Top 6 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune

Offices provide an absolute opportunity to ensure customer experience along with employee satisfaction and productivity, collectively contributing to overall business performance while also addressing climate action goals.

Hybrid or remote work is adding new dimensions to the location strategy, with portfolios expanding and diversifying to include ‘hub’ and digital campus-type delivery models, as more occupiers are now exploring suburban and peripheral locations. There are also massive shifts in the ways office lease transactions are done today. For instance, Colliers’ APAC research and client interactions indicate that more occupiers are exploring shorter lease terms and flexible space to drive efficiency and construct diversified portfolios that cater to different ways of working.

According to Colliers, the Asia Pacific region has possibly the most exciting 12 months ahead, globally, both in terms of money coming into Asia Pacific and Asian money looking to be deployed into other regions.

“While hybrid working prevails across most sectors, BFSI occupiers in India continue to focus on bringing employees back to the office, with over 90% rate of return to office. The preference towards traditional office spaces remains unabated, as they continue to prioritize data security and operational privacy over flexibility and lower capex. The proportion of flex component is relatively lower as compared to other prominent sectors. Going forward, the sector will continue to contribute upwards to conventional office space uptake in India, seeking new age Grade A office spaces, with increased customization addressing their data security, EHS compliances and other technical office space requirements.” Says, Vimal Nadar, Senior Director & Head of Research, Colliers India. 

In India, Mumbai dominates BFSI leasing during 2022-H1 2023, Bengaluru sees increased traction

Mumbai continued to drive BFSI leasing activity, grabbing one of every 3 deals during last 18 months (2022-H1 2023). During this period under review, the city accounted for approximately 31% of the total leasing by BSFI sector across the top six cities in India, with an absorption of over 3.2 million sq feet. While Mumbai continues to attract higher BFSI demand, Bengaluru has also seen rise in space take up by BFSI occupiers in the last 4-5 years, as large global BFSI occupiers are setting up their technology and back-office operations in the city owing to its huge digital talent pool & robust infrastructure. In H1 2023, Bengaluru surpassed Mumbai in total BFSI leasing, accounting for 34% of the total leasing in the sector. As digitisation remains core to financial services, BFSI players will continue to explore larger markets with presence of tech-hubs such as Bengaluru, Delhi-NCR, Hyderabad, Chennai, Pune. Tier II markets are also likely to witness heightened demand as occupiers look to setup & expand their back-office operations in these locations owing to improving infrastructure, availability of digital talent pool and favourable real estate costs.

City-wise share in total leasing by BFSI sector (2022-H1 2023)

Source: Colliers

Also Read: Office gross leasing to close at 40-45 mn sq ft in 2023

The post In India, leasing by BFSI players surge two-fold at about 7 million sq feet since 2020 appeared first on Square Feat India.

·       Engineering & Manufacturing gained significant share at 21%; Technology sector continued to dominate at 26% share

·       Leasing by Engineering and Manufacturing firms rose 3X YoY

·       Bengaluru and Chennai led overall leasing at 23% share each

·       New supply rose 32% YoY pushing vacancy levels up by 40 bps

 Q2 2023 recorded 14.6 mn sq ft of gross absorption across the top 6 cities, rising by 2% YoY, making a strong comeback after a cautious first quarter. Amidst global economic headwinds, demand continued to grow on a sequential basis, indicating a continued occupier confidence. Bengaluru and Chennai led the demand during Q2 2023, accounting for about half of the total leasing across top 6 cities. After witnessing lackluster demand for the last few quarters, Chennai saw a three-fold rise in demand during Q2 2023 led by enhanced occupier activity.

Key occupier trends in Grade A gross absorption (in million sq feet)

*Others include – consumables, E-commerce, etc.

Note- Q2: 1^st April to 30^th June of the year

Gross absorption: does not include lease renewals, pre-commitments and deals where only a letter of Intent has been signed.

Trends in Grade A gross absorption (in million sq feet)

Note- Q2: 1^st April to 30^th June of the year

Gross absorption: does not include lease renewals, pre-commitments and deals where only a letter of Intent has been signed.

Top 6 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune

Technology and Engineering & Manufacturing sectors together dominated the office leasing activity in Q2 2023 contributing to 47% of the total leasing during the quarter. Leasing by Engineering and Manufacturing firms witnessed a three-fold rise YoY, as occupiers continued to take up larger spaces across top markets. Bengaluru and Chennai were the most preferred locations for engineering and manufacturing companies for their office expansions.

While the share of Technology continued to dip from 40% in Q2 2022 to 26% in Q2 2023 amidst weak demand scenario, it remained dominant. At the same time, they continue to blend their real estate portfolio with flex as their core strategy, attracted by the flexibility, agility, and cost-effectiveness that they offer. Leasing by flex space surged 58% YoY during the quarter, as occupiers continued to adopt flex space as a long-term strategy.

“Engineering, manufacturing, BFSI and Flex spaces have seen a strong rise in leasing, at 71% rise YoY in Q2 2023. This signals optimism along with growth in domestic consumption & investment, translating into office space demand. Flex spaces continue to gain larger ground, as occupiers focus on building operational efficiencies through a hybrid and distributed work model. The second half of 2023 is starting on a promising note with resurgence in demand across geographies.” says Peush Jain, Managing Director, Office Services, India, Colliers.

Rental trends Pan India

Weighted Average Quoted (WAQ) Rents are in INR per square feet per month for warm shell offices and do not include common area maintenance (CAM) or taxes.

Chennai surpassed Mumbai and Delhi-NCR in leasing

After witnessing subdued activity for last few quarters, Chennai saw heightened leasing activity during the quarter and accounted for about 23% of the total leasing in Pan India, at par with Bengaluru. This surge can be attributed primarily to the growing demand from technology and engineering & manufacturing occupiers. The city is also seeing rising interest from flex operators, who are expanding their market coverage across cities. Share of Flex space in total leasing of the city surged to 19% in Q2 2023, from a mere 7% in Q2 2022.

Vacancy levels inched up led by exits and significant new supply

During Q2 2023, new supply across the top 6 cities increased 32% YoY, at 12.4 mn sq ft.  Bengaluru witnessed significant new completions, contributing to 31% of the total new supply, followed by Hyderabad at 24% share. However, amidst robust supply, vacancy levels surged by 40 basis points (bps) on a YoY basis at 17.4%, as occupiers continue to consolidate their real estate portfolios to bring in cost and space efficiency while they adopt and build hybrid work models.

“Q2 2023 witnessed a significant rise of 32% YoY in new supply as demand continued to improve. As the market stabilizes further with improved demand towards the latter part of the year, developers are likely to speed up their project completions. Amidst improving demand conditions supported by relevant market supply, vacancy levels are expected to remain rangebound & stabilize, with a potential upside on rentals by the end of the year.” says Vimal Nadar, Senior Director and Head of Research, Colliers India.

Trends in Grade A new supply (in million sq feet)

Note- Q2: 1^st April to 30^th June of the year

Top 6 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune

Also Read: For the first time, leasing by technology companies and Flex space operators almost neck-to-neck

The post Leasing by Engineering & Manufacturing firms tripled appeared first on Square Feat India.

The total area of the lease property is 4.20 lakh sq ft. According to documents available with SquareFeatIndia, provided by Propstack, the deal started on January 25 this year and will end on January 24, 2028.

The rent per month is Rs 1.79 crore, the rent will esclate by 13.5% after every 12 months. The total tenure of the rental agreement is 60 months.

The project in which the property has been leased is named WTC – Coral, in Bangalore. The total floors are 12 including the ground floor.

Also Read: Butlr Technologies Announces Partnership with Propstack for
Occupancy Sensing in India

The post EY leases 4.20 lac Sq Ft for 5 years appeared first on Square Feat India.

·       Bengaluru and Delhi drove 80% of the flex leasing; flex surpassed technology in leasing

·       Bengaluru and Delhi-NCR led the demand at 32% and 22% share respectively

Leasing by flex space operators in Q1 2023 inched closer to that of Technology companies for the first time ever. Flex occupiers leased 2.1 mn sq feet of space during Q1 2023, accounting for 20%, few paces behind the technology sector’s share at 22%. Together both the sectors accounted for nearly 42% of the total leasing across top 6 cities. Occupiers’ interest in flex spaces remain unabated as they continue to blend their conventional real estate portfolio in a bid to control costs while providing convenient ways to work for their employees. Large technology occupiers have also been leasing spaces in flex spaces due to their added benefits such as flexible lease terms, lower capex and modern workplace designs. This coupled with ongoing recessionary conditions and layoffs in technology sector has led to a relative pushback in conventional leasing by these occupiers. 

Note- Q1: 1^st January to 30^th March of the year

Leasing: does not include lease renewals, pre-commitments and deals where only a letter of Intent has been signed.

Bengaluru and Delhi-NCR were the most preferred locations for top flex operators for their portfolio expansion. Bengaluru accounted for nearly half of the total flex leasing during the quarter, followed by Delhi-NCR at 30% share. Along with flex, leasing by BFSI surged during the quarter, contributing to 14% of the total leasing across top 6 cities. During Q1 2023, nearly half of the leasing through large deals was by Flex and BFSI players who remained committed to their expansion plans.

“Share of Technology sector has declined steadily from 34% in Q1 2022 to 22% in Q1 2023, as corporates continue to focus on building in operational efficiencies through a hybrid model. While Hybrid working has impacted demand for conventional office spaces, it has also fueled demand for flex spaces across top markets. As long-term growth drivers for Tech sector remain strong in India, technology sector will continue to drive office leasing activity through a mix of conventional and flex spaces,” says Peush Jain, Managing Director, Office services, India, Colliers.

Leasing activity softens amidst recessionary pressures

The year 2023 has begun on a cautious note registering a 19% YoY decline in leasing activity across top 6 cities at 10.1 mn sq ft during the first quarter. On a sequential basis leasing continued to drop, indicating delayed decision-making by occupiers amidst continued economic uncertainties. Bengaluru and Delhi-NCR accounted for half of the total leasing during Q1 2023, led by select large deals in flex space.  

Trends in Grade A gross absorption (in million sq feet)

Note- Q1: 1^st January to 30^th March of the year

Gross absorption: does not include lease renewals, pre-commitments and deals where only a letter of Intent has been signed.

Top 6 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune

“Although office absorption is currently facing temporary downward pressures, leasing activity will likely pick up especially towards the latter part of the year, driven strong growth fundamentals. Large ticket deals continue to reflect its stronghold contributing to 50% of the total leasing of the quarter signaling positive market sentiment. From a supply perspective, while there is a robust supply pipeline, developers will likely remain cautious and avoid bringing in speculative supply,” says Vimal Nadar, Senior Director and Head of Research, Colliers India.

During Q1 2023, new supply across top 6 cities declined 34% YoY, at 9.5 mn sq ft.  Bengaluru witnessed significant new project completions, contributing to 42% of the total new supply, followed by Hyderabad at 25% share. Vacancy levels and rentals remained rangebound during the quarter, as the demand was at par with supply.

Trends in Grade A new supply (in million sq feet)

Note- Q1: 1^st January to 30^th March of the year

Top 6 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune

Also Read: India’s office sector can see leasing of 35-38 mn sq ft during 2023

The post For the first time, leasing by technology companies and Flex space operators almost neck-to-neck appeared first on Square Feat India.

By Varun Singh

Awfis, India’s largest home-grown flex workspace provider, has partnered with UNext, a next generation online learning organisation focused on the higher education ecosystem. As part of this partnership, Awfis has leased 65,000 sq ft. and 900+ seats to UNext in its marquee 100^th centre in Bengaluru. Knight Frank was the sole consultant partner for the transaction.

Awfis brought its expertise of catering to highly specialised and customized requirements of companies and made pioneering design innovations for UNext’s new office in Lido Mall, Bengaluru. Awfis’ Lido Mall center, also known as ‘Awfis One’ is strategically located at Bengaluru’s prominent CBD, MG Road and offers Grade-A infrastructure and unmatched amenities. The extraordinary provisions of the building include exceptional arrival experience, dedicated in-house studio and phygital collaboration setups across the workspace. 

In line with the post-pandemic reality and changing business needs, Awfis is working closely with leading startups, mid-sized corporates and large enterprises for their renewed & customized workspace needs.

“Our new Headquarters in Bengaluru will be a reflection of our values and culture. Like our aim to transform education and learning through technology, our cutting-edge corporate office will also have new-age elements to transform our employee and learner experience. We are delighted to partner with a leading player like Awfis for our evolved needs” said Ambrish Sinha, CEO, UNext Learning. 

Commenting on this association, Amit Ramani, Founder & CEO, Awfis said, “We are excited to have UNext partner with us for their workspace requirements, that are aligned with the new-age workforce. The design and aesthetics of our centres is testament to the growing focus of new-age companies towards creating multi-dimensional, interactive, and rewarding office spaces for employees returning to physical workplaces after a prolonged period of working from home.”

Awfis currently has the largest network of flexible workspaces with 131 coworking centres and 77,500 seats spread across 14 cities and is heading towards the 200 centres milestone by end of 2022.

Also Read: Digital transformation to rewrite future of real estate sector

The post Awfis leases 65,000+ Sq. Ft. Flex Space for UNext in Bengaluru appeared first on Square Feat India.

By Varun Singh

Leading diversified professional services and investment management company Colliers (NASDAQ and TSX: CIGI) released its joint report with CRE Matrix, ‘Startups Scale Up’, stating that startups are expected to lease about 29 million sq feet between 2022 to 2024, a 1.3 times increase from the 2019-2021 period.

The demand will be led by fintech and logistics startups as they have gained momentum post pandemic due to increased digital adoption and e-commerce boom, and hold a healthy pipeline in potential unicorns list. Additionally, increased digital adoption, availability of a deep talent pool, favourable government policies and funding options from venture capitalists are steering growth of startups.

“Increased entrepreneurship and rapid growth of startups has been one of the most remarkable trends in Indian office space. Startups are the fastest growing occupier group among other occupier groups, and currently occupy 10% of the office space. This has created numerous opportunities for office space providers to rethink and reposition their workplace offerings to attract diverse set of occupiers. As startups pick up pace, landlords need to consider the business life cycle and work preferences of the startups to capture the real estate demand from startups to drive more value.” Said, Ramesh Nair, CEO, India & Managing Director, Market Development, Asia, Colliers.

“About 30 mn sq ft office space in India is occupied by co-working or flex players. We believe a large share of this is occupied by start-ups. Therefore, anecdotally, start-ups currently occupy more than 49.7 mn sq ft. Our internal forecasts peg the start-ups occupancy to be about 78 mn sq ft of office space + 20-22 mn sq ft in flex spaces by 2024, totalling to about 100 mn sq ft by 2024. Within this start-ups segment, the Fintech niche aces all others as the leader in terms of number of start-ups, occupied office spaces and growth. We anticipate other sectors such as Ed-tech, Logistics, Healthtech, Proptech to catch-up soon.” said, Abhishek Kiran Gupta, CEO & Co-founder, CRE Matrix.

Bengaluru top startup hub, followed by Delhi-NCR
Bengaluru remains the top startup hub with a 34% leasing share during 2019-21, with Koramangala, HSR and Indiranagar being the preferred locations for startups. A well-developed ecosystem, deep technology talent, and a culture of entrepreneurship are major factors attracting startups here.

Delhi-NCR is amongst the fastest-growing market in terms of leasing by startups. Delhi-NCR witnessed a three-fold increase in leasing by startups during 2021 on a YoY basis. The region benefits from being a catchment for education institutions in the North and East India, and strong infrastructure.

Mumbai has seen certain pockets of startup activity over the years. However, relatively higher rentals, and high cost of living are often seen as deterrents by early-stage companies.

While metro cities remain the core hubs for startups, non metro cities are seeing growth in startup leasing as well as flex space take up due to low cost of living, reduced CAPEX and work from anywhere trend. Emerging hubs such as Jaipur, Ahmedabad, Indore, Coimbatore are likely to witness rise in flex space and startup occupancy as entrepreneurs are increasingly leveraging these locations to launch operations.

Plug and play office providers to benefit as startups eye on NextGen office spaces with flexible lease terms

Office space providers need to adapt to cater to the needs of start-ups and their workplace preferences. As startups focus on creating collaborative culture, demand for well designed, fully managed spaces will increase. Flexible lease terms, minimal lock-ins and security deposits will also be an important parameter for startups while leasing space. This will create ample opportunities for flex space providers in metro and non metro cities. Affordable locations close to city centres with expansion options are likely to be preferred by startups.

“Government’s push towards digitization and ease of doing business has provided a big boost to the startup ecosystem. The sector has also piqued the interest of investors that has helped the segment scale up creating numerous opportunities in office space. In the years to come, we will see a lot of changes in workplace designs with more focus on space design, amenities, technologies and customization.” says Vimal Nadar, Senior Director and Head of Research, Colliers India.

Last three years have seen significant activity in leasing by startups. Continuing this momentum, startups are likely to occupy 78 million sq feet of office space by 2024, accounting for 13% share from a mere 2% share in 2010. As of 2021, while global companies continue to dominate Indian office space occupying more than 60%, growth of startups has been highest, currently occupying a sizeable share of 10%.

Also Read: CIDCO lottery date for 5,730 homes in Taloja changed

The post Startups to lease 29 mn sq ft space during 2022-24 appeared first on Square Feat India.

By Varun Singh

Believe it or not, but the city of dreams Mumbai has witnessed a major decline in rental deals. There’s a sharp decline in the number of rental agreements being registered in Mumbai.

Data accessed by SquareFeatIndia, between April to June for the years 2019, 2020, and 2021 has revealed startling figures. The data have been accessed from the Department of Registration and Stamps.

While the three months in the year 2020 were marred by the COVID 19 led pandemic and the following lockdown. The three months in 2021 also saw a decline in registration figures of rental agreements in Mumbai, when compared to 2019.

In June 2021, a total of 19,021 leave and license agreements were registered in the city of Mumbai. This is a sharp fall from 22,974 leave and license agreements registered in Jue 2019.

The June figures according to industry experts include the carry-forward figures of April and May 2021, as the city was facing heavy restrictions then.

According to Yashika Rohiira, of Karma Realtors, there are multiple reasons for the decrease in the number of rental deals but all of them are connected to COVID 19.

She said, “With Pandemic, most people have returned to their homes, may it be college students or even those who use to work in Mumbai and hailed from different parts of the country. With the threat of another third wave looming, no one sees either colleges or workplaces opening up soon. Hence, there’s not much a desire in the people to come back and rent the places.”

For areas like Bandra, South Mumbai, and other places where foreign nationals would rent a lot of property even here there’s a downfall as many have left for their native countries as remote working has kicked in.

So who are the ones who are renting apartments in Mumbai? Rohiira answers this question too. She says, “Tenants of buildings undergoing redevelopment are the ones renting apartments and also those who were on rent either are moving to larger or smaller ones, depending on their need and capacity.”

With no clarity on when things will open up and also the danger of a third COVID wave looming overhead, the rental market of Mumbai is suffering.

Also Read: High Street Rentals Hit By Pandemic

The post Mumbai is Renting Out way too Less appeared first on Square Feat India.

By Varun Singh

Morgan Stanley and Oberoi Realty today announced that they have concluded negotiations and reached a deal for Morgan Stanley to lease up to 1.1 million square feet office space for 9.5 years from Oberoi Realty.

Morgan Stanley has decided to consolidate Morgan Stanley’s Mumbai Global In-house Centre (GIC) operations to a single campus in the city.

The new campus will be located at Oberoi Realty’s Commerz III building in Goregaon and will be ready in 2023.

Commenting on the announcement, Robert Rooney, Global Head of Technology, Operations and Fusion Resilience, Morgan Stanley, said, “The GICs are an integral part of our global business and they allow us to operate more efficiently and effectively as a Firm. We believe that bringing together our Mumbai GIC operations into one centralized campus will serve as a catalyst to creating further agility and synergy across all the GIC functions. The investment is a testament to the Firm’s commitment to India and our staff.”

Vikas Oberoi, CMD, Oberoi Realty, said, “Our relationship with Morgan Stanley goes back to 2007 and we are delighted to have them as our anchor tenant in this world class building. This is one of the largest office space transactions ever and proves our ability to grow the commercial vertical in the coming years. We are seeing major consolidation across all segments in the industry and well-capitalized players like us with a proven track record will continue to thrive in the toughest of circumstances. Our commitment to our annuity portfolio remains strong while we continue to capitalize on opportunities in the residential sector.”

Commerz III is a 2.3 Mn sq. ft LEED certified mixed-use building with state-of-the-art infrastructure and a part of Oberoi Garden City (OGC). Sprawling across 80 acres, OGC has residential, retail, hospitality, commercial developments and the Oberoi International School.

“Attracting and retaining world-class talent continues to be a top priority for us. The new facility in Mumbai will provide us with the right infrastructure and resources to deliver an innovative workplace environment and promote increased productivity and engagement through efficient ways of working,” added Thomas Nides, Vice Chairman, Morgan Stanley.

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