Office space leasing to be on a par with last 10-year average

Contrary to general expectation, the net absorption of office space in 2021 is expected to be on a par with the average of last 10 years i.e. 30-31 million sq ft. At present only a fraction of employees are coming to offices, the numbers are expected to improve once we have a vaccine. The future of co-working is looking robust, as average co-working space has doubled during 2020 compared to 2019.

This emerged during a webinar organised by Workplace Trends, a platform that unites industry professionals and leaders on emerging workplace trends. The platform is founded by Tushar Mittal, who also heads interior design firm SKV. Manisha Natarajan, a media, content & communication strategist, was moderating the penal discussion.

Speaking at the webinar, Anuj Puri, Chairman, ANAROCK Property Consultants, said “I am pleasantly surprised by the absorption. Honestly, I didn’t think that this calendar year will be 50-60 pc of 2019 absorption. In June, I would have said it would be between 16 to 19 million sq. ft, but now the net absorption is likely to be somewhere around 25 million sq. ft. It is surprising.”

Ramesh Nair, Country Head and CEO, JLL India, said, “We should take the average of the last 10-year as a benchmark, which is around 31 million sq. ft. and there is a very good chance that in 2021 we will cross that number.”

Anshul Jain, MD-South East Asia and India, C&W, said, “People are scared but there is also a clear distinction between personal and work. They are out in markets, going everywhere buying stuff, but when it is about coming to offices, they are not keen. It is because of corporate cultural issues – MNC work culture and for right reasons.”

Overall office absorption has been impacted because of the WFH arrangements considering the pandemic. The impact is here to stay for few years, but not permanently. “If we have to put a number for the next two year of how much real estate office absorption is going to be impacted because of WFH, it would be around 20-25 pc for the next two years,” said Nair.