2nd COVID wave dents commercial realty recovery

With the second wave of the COVID pandemic in full force, commercial leasing activity is expected to slow down once again. As a consequence, leasing activity is expected to pick up by September 2021, as opposed to the previous projection of July, according to a report by ICICI Securities.

The report added that the current trend of occupiers downsizing and delaying decisions on new leases is expected to continue in the coming months. The commercial real estate office market has witnessed a decline by 47% YoY in Q1, CY 2021 net absorption, which stood at 3.6 msf.

Nevertheless, the firm remained positive on the long term resilience of the Indian office market considering limited number of 8-10 large pan-India developers, reasonable rentals of US$ 1/psf/month and an abundance of STEM talent. As compared to 20 msf net absorption last year, the report expects the industry to gradually improve to a figure of 24.3 msf in CY21 and 29.8 msf in CY22.