Total monthly leasing activity for the month of January stood at 3.2 million square foot (msg) with the typical January lull post the 2022 year-end leasing momentum causing a 56.4% month-on-month (M-o-M) decline, shows a report by property brokerage firm JLL India. However, it was still higher by 93.1% year-o-year (Y-o-Y), data show.
Fresh leasing which included expansion and relocation-driven space take-up accounted for 87% of all recorded transactions during the month. The month of January is typically a slow period, as the holiday season for global corporates and future business planning take precedence, says the report. Mostly deals that slipped due to certain reasons get concluded during this month.
In January 2023, the top three cities in that order were Delhi NCR, Chennai, and Mumbai, accounting for 77% of monthly leasing activity. In terms of number of transactions, Mumbai remained the most active market, followed by Delhi-NCR, shows the report.
“January’s aggregate leasing activity was sluggish but on expected lines as this period coincides with the festive/holiday season and future business plans being put together with only spill over deals largely getting executed during this period. As future business projections are made under the shadow of global headwinds and the tech sector, facing a period of course correction is likely to be slow in space take-up, we expect that rising office occupancies and growth in other occupier segments should keep the momentum steady. However, an overall sluggishness is likely but more sustained trends of demand movement will be visible moving ahead over the course of the next 2-3 months,” said Samantak Das, chief economist and head of research and REIS, India, JLL.
“The IT sector is currently facing slower employment and poor corporate growth expectations, and as a result, space take-up may be more benign as part of a course correction. Given the shifting global context, other occupier categories are anticipated to keep a stable condition, although with a minor negative bias. The IT/ITeS category remained the largest driver of overall market activity in January, accounting for 28% of total market activity, thanks to one large transaction and a few smaller ones. While the actual numbers were identical m-o-m, BFSI and manufacturing made considerable advances in terms of share,” says the report.
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