The ever-expanding information technology and IT-enabled business sector has resulted in an increased demand for office spaces. The IT and ITeS sectors are the main drivers of leasing activity. IT companies rented 8 million square feet of space by the end of the third quarter of 2021, indicating that the rebound is solid.
According to Knight Frank, based on 18-month hiring by top five IT businesses, their demand is estimated to be 11.67 million sq. ft. in the near future, assuming full capacity is utilized.
Commenting on this trend, Navdeep Sardana, Chairman and Managing Director, Elite Landbase, said, “The restoration of economic activity, rapid immunization, hiring frenzy in the IT/ITes sector, and increased investor interest in Grade A commercial real estate assets are all indicative of positive growth outlook. The rapid vaccination has cemented confidence in the IT sector to flourish employment and company growth, keeping in mind pan-India expansion. Data security, stakeholder interests, and employee vaccination statuses are all important factors in determining whether or not employees will return to work.”
According to him, the rapid vaccination will give IT sector firms confidence to continue employing and grow their entire company, allowing them to expand in India. Data security, stakeholder interests, and employee vaccination status are all important factors in determining whether or not employees will return to work.
As per a recent report by Knight Frank, the total office transactions in NCR rose to 6.4 mn sq ft in 2021, and new completions witnessed an increase of 38 percent YoY. The region saw office space absorption of around 4 mn sq ft in H2 2021 compared to 2.1 mn sq ft in the year-ago period.
Ajendra Singh, VP Sales and Marketing, Spectrum Metro, said, “The solid rise in the leasing of office spaces can be ascribed to a number of factors like a drop in the Covid-19 cases, prompt vaccination programs, return to work from office models and the initiations of hiring sprees by IT firms and ITes sector. This development is portentous of a revival of the commercial real estate sector and probably a revitalization of the Indian economy, which was in doldrums due to Covid-19.”
In H2 2021, Gurugram accounted for 64% of all office space sales, with leasing 2.6 million square feet. On the other hand, Noida saw 1.1 million square feet leased (at par with H2 2020). The need for commercial office spaces will be fueled by increased GDP growth, as several sectors will outperform once they reach full capacity.
According to Bharat Kumar, Director, Spaze Group, “Consolidation, expansion with a scattered portfolio, and shared spaces are all factors that are expected to promote the use of ‘hub and spoke’ models across markets. Fresh recruiting statistics have resulted in an increased demand for office space, with hybrid models being embraced by industries across the economy.”
Despite the recent Covid-related disruptions, the Indian economy’s fundamental strength remains strong.
Rohit Mohan, Senior VP-Marketing, BPTP Limited, said, “Due to the rising relevance of technology-based business continuity, India’s prowess as a premier IT/ITeS services provider has remained intact and, in many ways, augmented. The top IT businesses’ hiring statistics are a solid indicator which, when taken into context, means that organizations will need to extend their current work capacity in the near to medium term.”
Source : Financial Express