Office Leasing Activity in January Drops 56.4% Month-on-Month To 3.2 Mn Sqft: JLL

The total monthly leasing activity in January stood at 3.2 million square feet and monthly leasing activity was down by 56.4 per cent month-on-month. However, it was still higher by 93.1 per cent year-on-year (y-o-y). Fresh leasing that included expansion and relocation-driven space take-up accounted for 87 per cent of all recorded transactions during the month, according to a report by real estate consultancy firm JLL.

In January 2023, the top-three cities in that order were Delhi-NCR, Chennai and Mumbai accounting for 77 per cent of monthly leasing activity. In terms of number of transactions, Mumbai remained the most active market, followed by Delhi-NCR.

Samantak Das, chief economist and head (research and REIS) for India at JLL, said, “January’s aggregate leasing activity was sluggish but on expected lines as this period coincides with the festive/holiday season and future business plans being put together with only spill over deals largely getting executed during this period. As future business projections are made under the shadow of global headwinds and the tech sector, facing a period of course correction is likely to be slow in space take-up, we expect that rising office occupancies and growth in other occupier segments should keep the momentum steady.”

He, however, added that an overall sluggishness is likely but more sustained trends of demand movement will be visible moving ahead over the course of the next 2-3 months.

The JLL report said the information technology (IT) sector is currently facing slower employment and poor corporate growth expectations, and as a result, space take-up may be more benign as part of a course correction. Given the shifting global context, other occupier categories are anticipated to keep a stable condition, although with a minor negative bias.

The IT/ITeS category remained the largest driver of the overall market activity in January, accounting for 28 per cent of the total market activity, thanks to one large transaction and a few smaller ones. Whilst the actual numbers were identical m-o-m, BFSI and manufacturing made considerable advances in terms of share.

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