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7,400 Office Leases of 90 Mn Sq. ft. Up for Renewal in Top 6 Cities in 2021

7,400 Office Leases of 90 Mn Sq. ft. Up for Renewal in Top 6 Cities in 2021

 Lease renewal pipeline in Bangalore, Gurugram, Mumbai, Noida, Pune & Chennai highest in 2021 at approx. 90 Mn sq. ft. space when compared to 2022 & 2023

 Mumbai, 12 May 2020: Industry data and ANAROCK Research reveals that over 7,400 leases spanning approx. 90 Mn sq. ft. area will come up for renewal in 2021 across the top 6 commercial real estate hubs – BengaluruMumbaiPuneChennaiGurugram and Noida. Data further reveals that 2021 has the highest lease expiry pipeline when compared to the next two years – 2022 and 2023. Year 2022 will see nearly 7,000 leases for approx. 78 Mn sq. ft. come up for renewal, and approx..4,200 leases for over 55 Mn sq. ft. in 2023. Of the approx. 7,400 leases expiring in 2021, Mumbai has the highest share at about 44%, followed by Pune with a 17% share. These two cities have been among the worst-affected by the second wave. The impact on leasing activity there over the year bears watching.

The total number of leases coming up for renewal in 2021 account for 90 Mn sq. ft. area. Interestingly, in terms of area, Bengaluru has the largest share at about 37%, with Mumbai coming in a distant second with a share of about 19%. Of the total number of leases coming up for renewal in 2021, Chennai comprises a 5% share – in terms of overall area, it has 12% share.

 

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Prashant Thakur, Director & Head – Research, ANAROCK Property Consultants says, “The office market has been under strain since the pandemic came in. However, the IT/ITeS sectors have been on a hiring spree in 2020 and 2021 due to massive business accruals. To accommodate these employees in a future when we see a gradual return of employees and adoption of hybrid workplace practices by Infotech giants, office space demand will grow. Office demand also is expected to gather momentum from 2022 in the wake of robust hiring by large corporates. These big corporates will definitely renew their leases, though some of the smaller companies may consider rationalizing space.”

“The leases coming up for renewal in 2021 were entered into at much lower rentals – at rates that prevailed 3 to 5 years ago – since office leases are usually signed for the long-term. There is some room for rental escalation in many of these leases.”

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