·       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

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JP Morgan has picked up over 1.16 million sq ft office space at Nirlon Knowledge Park, Goregaon with a 10-year lease. The deal has been signed between JP Morgan Services India Pvt ltd and Nirlon Ltd.

The rental is ₹145 per sq ft a month, with the clause of rental escalation of 15% every 3 years. When calculated the first year rent would be over ₹201.85 crore, and with the escalation the total rent for entire tenure of 10 years will cross ₹2,000 crore.

The chargeable area is close to 1.16 million sq ft. The 10 year lease period starts from December 15, 2021 and ends on December 14, 2031.

JP Morgan will get to use 1,130 car parks and there’s a 5 years lock in period too.

The leave and license has an extension option of two extension terms of 5 years each.

A security refundable dropout of ₹151.39 crore has been paid too. According to documents a Stamp duty of ₹425.65 crore has been paid for the registration of this leave and license agreement.

According to documents provided by Propstack a firm that accumulates data via public documents, the paperwork related to the deal was carried out in January 2022, but the registration took place only in June this year.

The leased out property is entire block B-9, which is a ground plus 23 floors, entire block B-10, which is ground plus 9 floors and a part in block B-11. The areas include basements in these blocks and other areas like storage etc.

This has become one of the biggest realty leave and license deal signed this year. A detailed email sent to JP Morgan and Nirlon ltd seeking their comment got us no response.

Recently, Citicorp Services India renewed its lease of 1.6 lakh sq ft office space at Nirlon Knowledge Park in Goregaon too for a period of five years. This office space is spread over six floors with a lock-in period till September 2024. Citicorp Services will be paying a rental of nearly Rs 137 crore across the total tenure which is of 60 months. The per month rent stands at Rs 2.28 crore. The lease tenure starts on September 15, 2022 and ends on September 14, 2027. The lock-in period is from September 15, 2022 to September 14, 2024. Whereas the notice period is of 6 months.

In June this year 2.39 lakh sq ft of land area was leased out for a whopping Rs 3.57 crore per month for a period of 258 months. Amazon Data Services India Pvt Ltd rented the land parcel in Powai owned by Larsen and Toubro Ltd.

Yes Bank on August 24, 2022 signed a rental deal to lease 44,000 sq ft area in Mumbai’s Goregaon for Rs 53.19 lakh per month, for a period of 60 months. The rental period starts from September 22, 2022 and ends five years later on September 22, 2027.

In July 2020 during the Pandemic Morgan Stanley had concluded negotiations and reached a deal to lease up to 1.1 million sq ft office space for 9.5 years from Oberoi Realty in Commerz III, Goregaon. This year too according to reports Morgan Stanley leased an additional 3.35 lakh sq ft. The total rent is nearly Rs 2,000 crore for the entire tenure of 9.5 years.

In July 2020 Godrej Fund Management leased 2 lakh sq ft office space to A.P. Moller – Maersk’s business units in Mumbai. The space is located in Godrej Two, Vikhroli. The lease amount was Rs 13.09 crore.

“Goregaon East seems to be fast developing as a financial mini-hub after BKC, with likes of JP Morgan, Deutsche Bank, KPMG, PWC, Morgan Stanley, We foresee a significant rise in large commercial office deals being signed up, thanks to steady economic recovery, gradual return to work-from-office policy, strong job market,” said Abhishek Kiran Gupta, CEO, CRE Matrix.

Also Read: Delhi: Aakash Education’s Aakash Chaudhry pays ₹137 crore for a bungalow Mumbai: Citicorp pays ₹137 crore rent for 5 years for an office space

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By Varun Singh

Mumbai is known as a city where people from all over the country come in to work. They rent a lot of houses as many of them are single individuals.

Rental real estate in the city of Mumbai is huge, the rents are big numbers too.

However, in the first three months of the year 2022 the number of apartments and other units that were put on rent is lower than what was rented in the first three months of the year 2021.

An analysis by SquareFeatIndia.com of the first three months of 2022 has shown that total number of units that were leased stood at 71,460.

Whereas the cumulative figure in the corresponding months of the year 2021 stood at 72,694.

The difference between Q1 2022 and that of Q1 2021 is that of 1234 less.

Lets now see the exact number of units that were rented in the months of 2022 and 2021.

In the months of January in 2021, a total of 22,520 rental deals were registered of which 18,729 were e-registration of leave and license whereas the remaining 3,791 were physical registration.

In February 2021, a total of 21,545 e-registration of leave and license took place whereas 3,539 physical registration taking the total to 25,084.

In March 2021, a total of 25,090 leave and license registration took place of which 21,895 were e-registration whereas the remaining 3195 were physical registration.

The total leave and license registration in the first three months of 2021 in Mumbai city stood at 72,694.

Now lets analyze the figures from the year 2022.

In January 2022, total leave and license registration stood at 23,607, of which 21,095 were e-registration whereas 2,512 physical registration took place in Mumbai.

In February the total registrations of leave and license stood at 21,918 of which 18928 were e-registrations, whereas the remaining 2,990 were physical registration.

In March total 25,935 leave and license were registered of which 23,304 were e-registrations, whereas 2,631 were physical registrations.

Thus taking the total number of leave and license registration in Mumbai city to 71,460 which is 1,234 deals less than the previous year during the same time.

Also Read: More Rental deals took place in Oct 21 than Oct 20

The post Lesser homes in Mumbai Rented in Q1 22 vs Q1 2021 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

e-Registration is the new norm when it comes to registering of rental agreement.

In Feb 2014 the number of rental agreements registered online stood at a mere 12.

The number of e-Registration of rental agreements grew to 21,500 in Feb 2021.

This is the second highest ever e-Registration of leave and license agreement in the recorded history of Mumbai’s real estate market.

The most number of e-Registration of leave and license agreement was in December 2020.

In the month of December 2020 a total of 22,438 rental agreement were registered online.

If attention is paid to the details, then since 2016, the number of online registrations of leave and license agreements begun showing rise.

But why is the number of online registration of leave and license going up?

Yashika Rohiira of Karma Realtors says, convenience is the most important reason why people opt for e-Registration of rental agreements.

“In online registration the agent comes to the home of the tenant or the landlord with the laptop and the required machines. There exists already a format, it is available in soft copy and once filled can be uploaded easily online,” said Yashika.

Meanwhile, the rental market has performed better in the top luxury market.

Amidst various industry reforms in the last seven years, multiple new trends emerged in the Indian residential real estate market. Strikingly, housing rentals in key luxury markets saw better y-o-y growth between 2014-2020 than average capital prices in the same localities.

Anuj Puri, Chairman – ANAROCK Property Consultants says, “The average rentals for a house of minimum 2,000 sq. ft. size in the top 7 cities’ key luxury hotspots rose anywhere between 17% to 26% in 2020, as compared to 2014. In the same period, average capital prices in these micro-markets saw a maximum rise of 15% – and some even saw a marginal dip.”

“ANAROCK data also reveals that from 2014 to 2020, rental prices in the top luxury markets saw consistent y-o-y growth – averaging between 3-6% annually.” 

Anuj Puri, Chairman – ANAROCK Property Consultants 

According to ANAROCK in 2017, various structural reforms like RERA and GST were implemented. After this period, most localities only saw a marginal capital price rise averaging between 1-3% – while rental markets continued their growth run.

Also Read: Builders To Sell Homes Online.

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By Varun Singh

Real Estate market is not all about carrying out home sales. A major protion of the the real estate industry comprises of rent.

If any given month in the city of Mumbai 5,000 home sales take place then over 15k rent agreements are also registered.

The less spoken rent market of Mumbai has shown an exponential growth over the past few years.

In January 2017, the rent market stood at 15,106 agreements. The figure jumped to 22,514 in January 2021.

The figures includes both leave and license (physical) as well as leave and license (e-registration).

Data accessed by SquareFeatIndia shows that over the years, rental agreeemnts being registered has increased.

The other important fact that has cone out to the fore is that more people prefer digital registration over physical.

Also Read: Physical registration of Leave & License re-starts

For example, in the month of January 2017, a total of 7,566 rental agreements were physically registered.

This figure is more than 7,540 e-registration of leave and licenses that took place in 2017.

“Work from home has shot up for many sectors.Hence instead of employees going daily to office, they prefer a good house where they can stay and work both peacefully. This has happened more post covid19 . Post covid lot of people found the need for space,hence they decided to buy and take house on temporary rent till they get possession. One category, is of people who after liking a gated community, move in the complex to take experience before buying. Even pre covid ,over grown families decided to move out and take properties on rent. The preferred choice is mostly a gated community with amenities.”

Rajiv Jain, Ruchika Shelters

However, in January 2021, the physical registration came down to 3,791, whereas the e-registration figures grew to 18,723.

Also Read: Physical registration of leave and license agreement stopped till end of July

This also goes to show that many opting for an apartment on rent prefer the digital mode of registration over personally visiting the office and registering the agreement.

Meanwhile, if one has to gauage the rise in sheer number of homes, offices and shops being put on rent, then it has also increased drastically.

“A lot of re-sizing of homes and offices has taken place due to work from home. In 2021, most of the crowd has come back to the city, resulting in the residential apartments being leased out quickly. There has also been a slight reduction in the rents of commercial units, which is the actual reason of growth in the rental market. With schools and colleges opening soon, there’s a spurt expected in the rental market by April 2021.”

Yashika Rohira, Karma Realtors

In January 2017, total 15,106 rent agreements were registered, the figure grew to 19,064 in 2018.

It has been since then seeing a rise in January 2020 a total of 21,174 rent agreement were registered.

Finally in January 2021, the number grew to it five year high at 22,514 rental agreements being registered.

Also Read: Nov 2020 Sees Highest Rental Deals Since 2012

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By Varun Singh

On Tuesday the Inspector General of Registration and Controller of Stamps, Omprakash Deshmukh issued a circular allowing physical registration of leave and license agreements.

A complete halt was brought in by the department via a circular in April on physical registration of the leave and license agreements. It was to be followed till July 2020.

Also Read: Physical registration of leave and license agreement stopped till end of July

However, on June 2, Deshmukh issued a fresh circular which amended the earlier clause.

The new circular allows sub registrars in all the offices of registration to carry out physical registration of leave and license. The registration can be carried out if other documents for registration are less in numbers.

When contacted Deshmukh confirmed that the circular has been issued by his office. He said. “All the offices that are open for registration in Mumbai and other cities will follow this order. Offices in containment zones are still not open to public.”

In May, ten offices of registrations were opened in the city of Mumbai.

According to Adv Vinod Sampat, President, Registration Fee & Stamp Duty Payers Association, there are many restrictions as regards to e-registration of Leave & License agreements. To begin with document has to be in the format prescribed by the department.

“The present draft of Leave & License as suggested by department may not take into consideration various clauses like lock in period, penalty clause, NOC of CHS, use of premises by employees of Corporates,” he said,

Sampat says, now parties can register the Leave & License agreement with their clauses by approaching the Sub registrar subject to their being a vacant time slot with Jt. Sub Registrar. This is a good move for one and all.”

Meanwhile, the circular emphasizes that registration office staff should encourage and inform people to use the facility of e-registration.

In the month of May, only in Mumbai a total revenue of Rs 18.12 crore was collected via registration. Of this 990 documents registered were that of leave and license and all were via e-registration.

The May revenue was 4 lakh per cent more than the money collected in April which stood at Rs 43,574.

Also Read: May month’s registration income in Mumbai jumps 4 lac % from April

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By Varun Singh

After a long halt, finally registration offices started functioning in Mumbai. Due to the Corona virus pandemic in the country a lockdown has been imposed.

During the lockdown these offices in Mumbai were also shut. However, on Monday 10 offices started functioning.

Omprakash Deshmukh, IGR, confirmed that 10 offices in Mumbai were opened. “We opened the offices in the city of Mumbai. There are 10 such offices that have been opened, offices in containment zones are shut as they cannot be opened,” he said.

According to data available a total of 487 documents were registered with these 10 offices in the city.

481 documents registered are that of leave and license (e-registration), three are that of conveyance (sales) and remaining three are agreement relating to deposit of title deeds.

The ten offices opened include registration office Mumbai city 1, Mumbai city 2, Mumbai city marriage registration office, offices of Andheri 2, Andheri 3, Andheri 4, office of Borivali 7, office of Kurla 4 and marriage registration office of Mumbai suburban district.

These offices are open from 10 am to 5 pm for registration purposes.

The total revenue collected from the 487 documents registered stands at close to Rs 23.74 lakh.

Till Monday only 1 document was registered in Mumbai. This was a leave and license document which had fetched a mere Rs 424.

In April month only 27 documents fetching Rs Rs 43,547 were registered with the offices. The amount stood at Rs 377 crore in March.

With the offices for registering of documents starting again, there’s a hope that the state will get a decent revenue.

Also Read: Only 1 registration in Mumbai in 10 days of May

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By Varun Singh

Mumbai generates the highest revenue for the stamp duty and registration department. However, for the last few days, the situation is grim.

The lockdown due to the coronavirus pandemic in the city has impacted the registration figures too.

Only one registration took place in the last 10 days in the entire city of Mumbai.

The only registration was a leave and license e-registration. Further surprising is the revenue collected from this registration.

Only Rs 424 was the revenue collected from the single e-registration that took place in Mumbai.

There has been a continuous slide in the number of documents being registered with the stamp duty and registration office.

In April only a total of 27 documents were registered with the stamp duty and registration offices in Mumbai.

This was a huge fall from 25,170 documents that were registered in the month of March. 

While from all the 27 documents registered in April the revenue collected was only Rs 43,547.

This was a huge slide from the revenue collected in March, which stood at Rs 377 core. In contrast, February revenue collected stood close to Rs 470 crore.

Post Covid19, and the following lockdown since March last week in the country, registration figures have dwindled.

Adv Vinod Sampat says that, this amount (Only Rs 424 collected in May) is one of the lowest.

He further cautions why people should register their leave and license agreements even if the rents are low.

He said,”Normally people register documents because it is a statutory obligation. However many properties in slums are not registered. Same is the case with properties where rent yield is low as people try to save money at the expense of compromising as regards getting back the property and on the basis of submissions made by broker. This puts the licencee in dominating position.when litigation arises.”

Also Read: Revenue from registration in Mumbai falls to 0.001% in April from March

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By Varun Singh

More and more people are opting for e-registration of their leave and license agreements than physically registering them.

In the first four months of 2020, a total of 57,972 leave and license agreements were registered in Mumbai.

Data available from the Registration and Stamp duty office shows a spike in e-registration compared to physical registration.

Mumbai preferred e-registration 3.7 times over physical registration of leave and license agreement.

Also Read: Physical registration of leave and license agreement stopped till end of July

In January 16,164 leave and license agreements were registered via e-registration. While only 5,008 rent agreements were registered physically.

In February total e-registration of leave and license agreement stood at 16,767, while physical was 4,264.

Similarly in March 12,907 leave and license agreements were registered online, while 2,835 were physically registered.

In April all the documents registered were online and it stood at a figure of 27.

Thus a huge number of 45,865 leave and license agreements were registered online, while 12,107 were physically registered.

However, while online registration gave a revenue of mere Rs 6.6 core in four months. The revenue from physical registration of leave and license registration stood at Rs 16.97 crore.

Adv Prakkash Rohira said, “Online registration of leave and license agreement has a set format, hence many prefer it. Also it can be done on weekends and holidays. Whereas larger transactions with customized clauses are physically registered and revenue generated is huge too.”

Conveyance (sales) registration is the highest revenue generator for the registration and stamp duty office. In Mumbai, a total of 15,875 Conveyance (sales) agreement were registered in the first four months. They generated a revenue of Rs 1,195 crore and more.

In the month of January a total of 6150 Conveyance (sales) agreement were registered in Mumbai, it generated a revenue of Rs 454 crore.

In February the revenue stood at Rs 437 crore after 5,927 Conveyance (sales) agreement were registered in the city.

In March 3,798 Conveyance (sales) documents were registered generating a revenue of Rs 304 crore.

April saw no registration or Conveyance (sales) registration in Mumbai.

Stamp duty and registration is amongst the top revenue generator for the state o Maharashtra. The lockdown in the city and state has impacted the collection of stamp duty and registration too.

The collection fell to 0.001% in April from what it was in March. In April Mumbai generated a revenue of Rs 43,547 crore, compared to Rs 377 crore generated in March.

Also Read: Revenue from registration in Mumbai falls to 0.001% in April from March

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