Office space renewals gaining pace post-pandemic : Colliers

Occupiers are increasingly renewing their office spaces since April 2020 when the pandemic started, as per Colliers and Propstacks joint report, Evolving office space trends in a post pandemic world. Renewals for office spaces accounted for 23 of the total leasing during the 15-month period starting April 2020.

Occupiers are increasingly renewing their office spaces since April 2020 when the pandemic started, as per Colliers' and Propstack's joint report, ''Evolving office space trends in a post-pandemic world.'' Renewals for office spaces accounted for 23% of the total leasing during the 15 months starting April 2020. This is up 8 percentage points from the 15 months pre-pandemic till March 2020.

Bengaluru followed by Mumbai witnessed the highest share of term renewals post-pandemic.

''Occupiers are using the current favorable market dynamics to negotiate renewals. They are looking at more flexibility in leases too. Occupiers' decisions are quicker than last year, with a focus on new-generation offices. Re-entry of employees has started in India, with many companies planning to get back more employees from January 2022. This will prompt occupiers to make leasing decisions quicker,'' said Ramesh Nair, Chief Executive Officer | India & Managing Director, Market Development, at Colliers India.

''Occupiers are gradually getting back to their offices, but high-density office space may be a trend that has peaked. COVID-19 may also accelerate a trend from leasing office space in the CBD to suburbs. Corporates will face a challenge to design and modify existing office space to support a company's established culture while following the new health protocols & yet promote social interaction & collaboration,'' said Raja Seetharaman, Co-founder, Propstack.

Delhi-NCR and Bengaluru's most resilient office markets are post-pandemic.

Delhi NCR and Bengaluru emerged as the most resilient cities in the office markets post-pandemic, as per the report. Compared to 15 months pre-pandemic, these two cities saw the lowest decline in leasing in the 15 months post-April 2020.

The leasing in Bengaluru was led by the IT sector, followed by the BFSI sector. In Bengaluru, the BFSI sector's share in leasing rose to 12% in the month's post-pandemic, up 6 percentage points from pre-pandemic levels. In NCR, the IT sector's leasing improved post-pandemic.

Overall, total leasing declined 39% in the 15 months post-pandemic. Southern cities accounted for 52% of the leasing post-pandemic.

BFSI sector gaining ground Global and domestic BFSI firms expanded their real estate footprint post-pandemic. BFSI firms accounted for 15% of the total share in leasing post-pandemic, from 10% share before. Bengaluru, Chennai, and Mumbai seeing traction from BFSI companies led by global in-house centers, and insurance firms. Mumbai saw the BFSI sector overtaking the IT sector's leasing post-pandemic.

Overall, coworking leasing share fell to 4% as operators avoided speculative development, post-pandemic.

About Colliers Colliers (NASDAQ: CIGI) (TSX: CIGI) is a leading diversified professional service and investment management company. With operations in 67 countries, our more than 15,000 enterprising professionals work collaboratively to provide expert advice to real estate occupiers, owners and investors. For more than 25 years, our experienced leadership with significant insider ownership has delivered compound annual investment returns of almost 20% for shareholders. With annualized revenues of $3.0 billion ($3.3 billion including affiliates) and $40 billion of assets under management, we maximize the potential of the property and accelerate the success of our clients and our people.

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