Crisil Ratings Forecasts Rise in Office Space Leasing Amid Geopolitical Uncertainties

Crisil Ratings predicts a 6-7% rise in net office space leasing across India's top seven cities in this fiscal year. Despite challenges from geopolitical tensions and AI disruptions, the IT/ITeS sector remains a key demand driver. By fiscal year-end, vacancy rates may decrease by 50 bps.

Net leasing of office space is projected to rise by 6-7% across top cities in India this fiscal year, as reported by Crisil Ratings. However, geopolitical tensions and AI disruptions pose potential risks to this growth.

The IT and ITeS sectors continue to drive demand for office space, but global uncertainties make companies cautious about expansion, affecting investments. Crisil Ratings noted that vacancy rates in Grade A commercial spaces could decrease to 15.5-16% by year-end.

Despite short-term challenges, India's competitive strengths, including a skilled workforce and supportive policies, are expected to support the sector's growth, according to Gautam Shahi, Senior Director at Crisil Ratings.