The report also notes that financial Services and technology segments were the biggest contributors at 21% and 19% respectively. Co-working operators accounted for 14% of the market activity in H1 2020.
International Property Consultants, Savills India launched a comprehensive report – India Market Watch Office – H1 2020 on the country’s top office markets including Mumbai, Delhi – National Capital Region, Bengaluru, Chennai, Pune and Hyderabad.
The report highlights that despite a drop in the leasing activity, the weighted average rental grew by 2% Y-o-Y in H1 2020. As Mumbai Metropolitan Region (MMR) remained under lockdown for an extensive period, office leasing stood at 2.8 mn sq.ft, a decline of nearly 24% YoY. The report also notes that financial Services and technology segments were the biggest contributors at 21% and 19% respectively. Co-working operators accounted for 14% of the market activity in H1 2020.
Since the last 5 years, the office space in Mumbai has been performing well and the year 2019 witnessed strong leasing activity with transactions of over 6.9 mn sq.ft. The momentum continued into 2020; with space take up remaining buoyant till the nation-wide lockdown towards the end of Q1- 2020.
|H1 2020||H1 2019|
|Demand||2.8 mn sq. ft.||3.7 mn sq. ft.|
|Supply||0.8 mn sq. ft.||2.7 mn sq. ft.|
Bhavin Thakker, MD, Mumbai & Head – Worldwide Occupier Services, Savills India said “Leasing activity and additional supply have reduced as an immediate impact owing to the COVID-19 pandemic. New leasing was subdued in H1 2020 and we expect similar activity levels with some fresh leasing for the rest of the year. In Mumbai, we are witnessing some corporates opting to marginally reduce their footprint from a short-term standpoint and are also looking to adopt a hub-and-spoke model, especially focusing on locations that are close to employee homes.”
The report further highlights that the overall recovery of commercial office market is expected to be highly contingent on how businesses react to the ever-evolving and dynamic COVID-19 situation. In the near term the tenant focus is expected to be clearly on cost optimization and creation of safe and secure workplaces. Demand generated by the healthcare segment is expected to remain favourable in the medium term.
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