In this report we analyse the Q2 2020 Indian office markets’ performance and reflect on the impact felt in the commercial office markets as the country navigates through the COVID-19 induced headwinds. The momentum in office demand carried through 2019 and Q1 2020 was blighted by the COVID pandemic and lockdown which severely impacted the Q2 market activity. Gross leasing was recorded at 7.32 msf, lower by 55% q-o-q (-62% y-o-y). Overall leasing in H1 2020 was 26% lower as compared to H1 2019.
Leasing activity across all major cities was adversely impacted in Q2, as many large occupiers deferred their space take-up and chose to adopt a cautious ‘wait and watch’ approach.
- 7.32 msf gross leasing volume in Q2 2020; 55% lower q-o-q
- Bengaluru and Hyderabad were the most active markets with 30% and 22% share in gross leasing volumes in Q2
- The net absorption in Q2 2020 stands at 3.76 msf, which is lower by 49% on a quarterly basis
- New completions in Q2 2020 recorded at 7.54 msf, which is lower by 24% on a quarterly basis, Hyderabad leads new supply with a share of 40%
- IT-BPM sector has maximum share with 43% share in overall leasing followed by Healthcare & Pharma at 19%, Captive centres (GCCs) with 10%. Flex workspaces have only accounted for just about 4% share during Q2.