2024: When Office Leasing Normalises

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Demand for office space will have to wait till it gets it's very own 'Reached Pre-Covid Level' signboard. In fact, per Ramesh Nair of Colliers, "At least 2024 till we reach 2019 level." 

Thought Things Were Going Well

For a while it had. New demand for office space increased dramatically since bottoming out in June 2020, reaching new heights by August 2021, before running out of steam again.

Globally, experts believe that the large ramp-up in 2021 was due to pent-up demand—a surge of employers driving out of the pitlane and into the market once sentiment brightened in light of rapid vaccinations. 

The recent decline in new demand for office space suggests that the initial wave of pent-up demand has been satiated. 

Things Should Start Improving Soon

2021 should end with around 27 million sq. ft. of office space leasing, against 26 million sq. ft. in 2020. 

FYI, Net leasing of office space across seven major cities stood at nearly 50 million sq. ft. in 2019. 

With rents becoming more affordable and landlords throwing in incentives like capex and lower security deposits, corporates, which over the last year were mainly renewing their leasing agreements because of uncertainties, are now expected to lease new offices - to expand.