Real Estate

Covid-19 impact: India’s office space absorption likely to drop by 4.1 to 4.6 million sq ft

Anil Urs Bengaluru | Updated on April 02, 2020 Published on April 02, 2020

A representational image

Due to the coronavirus (Covid-19) effect, India’s office space absorption is likely to see lower absorption to the extent of 4.1 to 4.6 million square feet in the near term (up to six months). For the whole year 2019, total office space absorption was 58.6 mn sq ft.

“We believe that India’s office sector, which has seen a robust run over the last three years, is likely to see lower gross absorption in 2020, across the top seven cities, stemming from delays in decision-making arising from the ongoing Covid-19 outbreak,” said Colliers International.

It further said, “While we anticipate leasing delays of up to a quarter, if the current lockdown extends beyond April 15, we can expect delays of up to two quarters. Revision of expansion plans and business strategy should adversely impact near-term space take-up. Multinational companies with head offices in the US or Europe will probably postpone decision-making. And led by the current lockdown, we anticipate construction completions will be delayed, pushing occupancy to later quarters.”

Across the seven major Indian cities, the IT-Business Process Management sector continued to dominate the leasing activities in the first quarter (Q1) 2020, accounting for 55 per cent share in leasing. Flexible workspace operators accounted for about 15 per cent of the gross leasing in Q1 2020.

Ram Chandnani, Managing Director, Advisory & Transaction Services, India, CBRE South Asia, said, “As the Covid-19 crisis develops in the UK, CBRE Research is watching the residential market closely. Like many industries in the UK, we expect a period of inactivity in the residential sector, as the country hunkers down to fight the virus. We will continue to closely monitor the situation and report further in the coming weeks.”

Sankey Prasad, Managing Director and Chairman, Colliers India, said, “While the Indian market is likely to see adverse impact from the ongoing Covid-19 pandemic, India is relatively better placed in terms of economic growth, with GDP expected to grow at 4.4 per cent. Going ahead, demand from resilient sectors such as technology should be stable, with pharmaceuticals, e-commerce and logistics sectors also increasing.”

Published on April 02, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.