Leasing of offices in India have recovered to pre-pandemic levels after government-imposed lockdowns to combat the coronavirus led to the steepest fall in a decade, according to data from Knight Frank.
Gross leasings across the top eight cities in October-December reached 115% of the quarterly average for 2019 from 31% the previous quarter, the research firm said in a report published Wednesday. The technology sector dominated with 41% of total leasings across the second half of 2020 with Bengaluru, known as India’s Silicon Valley, seeing transactions rise 8% during the period from the previous year.
“Pre-commitments contributed 24% of the total transacted volume of 1.63 million meters in the fourth quarter, signifying that businesses are re-initiating expansion plans in the new normal,” Knight Frank said. “With the possibility of a viable vaccine being made available soon, occupiers have renewed their search for expansion opportunities.”
India imposed one of the world’s strictest lockdowns toward the end of March, which slammed almost all sectors of the economy while boosting the need for technology-driven services. Business have been gradually reopening since September as fresh infections slow.
Office space absorption dropped 33% year-on-year in July-December to 2.06 million square meters, but increased by 28.8% from the first half. Average office rents in Bengaluru, Chennai and Hyderabad maintained 2019 levels, but rents in Mumbai, Pune and the National Capital Region fell by 5.6%, 6% and 4.4% respectively.
The data also show residential sales of 94,997 units between July-December, a fall of 19% from a year ago but an improvement of around 60% from the first half, as a steep cut in interest rates made it more attractive to buy. Key states like Maharashtra, which houses Mumbai, also reduced local taxes and overall prices fell in some cities.
Homes costing more than 5 million rupees constituted 57% of all sales during the period, as the relatively wealthy were less affected by the pandemic.