Net leasing of office space is likely to rise by 41-49 per cent across seven major cities this year on a lower base and improved demand post-pandemic, according to JLL India.
Net absorption or leasing of office space stood at 26.2 million square feet in 2021, and it is likely to be in the range of 37-39 million square feet this year across seven cities—Bengaluru, Delhi NCR, Chennai, Hyderabad, Kolkata, Mumbai and Pune.
Nevertheless, the net office leasing will remain lower than the record absorption achieved in 2019—the pre-COVID year—at 47.9 million square feet.
Real estate consultant JLL India calculates net absorption as the new floor space occupied less floor space vacated. Floor space that is pre-committed is not considered to be absorbed until it is physically occupied.
The net absorption for the first nine months of 2022 (January-September) is at a three-year high of 30.3 million square feet and on track to match the 5-year average (2015-2019) for the full year, it added.
"There is a slight decline in space take-up by tech firms, but manufacturing, healthcare and flex are major movers in 2022 and are also expected to remain big drivers of office demand in 2023," JLL said in a statement.
The net absorption of office space in 2023 is expected to be 37-40 million square feet, the consultant projected.
On housing, JLL India said the residential segment has witnessed the smartest and the fastest recovery, with annual sales in 2022 expected to surpass 2 lakh units, the highest in over a decade and near next to the 2010 sales of 2,16,762 units. Quarterly residential sales were over 50,000 units in each of the first three quarters of 2022.
"We will keep our eyes on the evolving headwinds, with inflationary pressures and global growth in our rear-view mirror. The office, residential and warehousing segments are all on track to improve further on their 2022 performance, and we will watch the next year unfold with anticipation," said Samantak Das, Chief Economist and Head of Research, India, JLL.
According to JLL India, the demand for warehousing and light manufacturing space in 2022 is estimated to cross 40 million square feet, surpassing the last year's number.
Light manufacturing means manufacturing assembly and value-added activities that are non-polluting and can be undertaken in Grade A warehousing/industrial parks with no/minor modifications of warehouse specifications.