Indian Office Market May Take 2 Years To Reach Pre-Covid Level: Colliers

The leasing of office space across major cities is likely to rise marginally this year with corporates becoming less cautious, but it will take at least two years to reach the pre-COVID level, Colliers India CEO Ramesh Nair has said.

Colliers India, which is part of Canada-based Colliers, is one of the leading property consultants.

In an interview with PTI, Nair said India's office market has become favourable for tenants.

When asked about office leasing during the 2021 calendar year, he said: "This year will be slightly better more than last year, with good bounce for the next year".

Nair mentioned that corporate occupiers have finally reduced their caution.

He pointed out that corporates were very cautious till June-July this year because of the second wave of the COVID pandemic.

Nair said the net office leasing could rise to 27 million square feet across seven major cities in 2021 against 26 million square feet last year.

"At least 2024 till we reach 2019 level," he said when asked whether net leasing of office could reach the record transactions achieved in 2019.

Net leasing of office space across seven major cities stood at nearly 50 million square feet in 2019.

The Colliers India CEO said that landlords were going the extra mile to attract tenants, including committing Capex and less security deposits.

Nair also sounded optimistic about the future growth of the co-working segment in India, with demand for managed office space rising amid the pandemic.

In the office market, he said corporates over the last one year were mainly renewing their leasing agreements because of uncertainties, but now they are expected to go for fresh leasing to expand.

The work for home (WFH) concept would also continue in some form, Nair said.

On the industrial and logistics spaces segment, he said the demand continued to be strong from e-commerce players and third-party logistics firms.

For faster delivery, the e-commerce operators will look for in-city warehousing.

However, he pointed out that land prices and construction costs have gone faster than the growth in rentals for warehousing space.

Going forward, Nair also sees the launch of Real Estate Investment Trust (REIT) for leased warehousing and retail real estate assets.

To tap likely growth in office, warehousing, data centre and project management, Colliers India will hire at least 1,000 employees next year and launch two new services in January to expand its operations.

Colliers India currently has around 3,000 employees.

Nair, an industry veteran with more than 20 years of experience, joined Colliers India as CEO in July this year. He is also Managing Director, Market Development, Asia.

Nair wants Colliers India to be among the "top three" property consultants in the country in terms of "profitability".

Listing out his five focus areas, Nair said the company will increase the team size, adopt the right culture, market its brand well, introduce innovative technologies, and expand client relationships.

"We are going to stay focused on some of our big strengths. We are the largest project management company in the country.

"We need to gain market share in transactions related to office, industrial & warehousing and capital market segments. We will do that by making sure we hire talent at all levels in these three departments," he said.

Globally, Colliers, leading diversified professional services and investment management company, has operations in 66 countries with more than 15,000 enterprising professionals.

It provides expert advice to real estate occupiers, owners and investors.

Colliers has annualised revenues of USD 3.3 billion (USD 3.6 billion, including affiliates) and USD 45 billion of assets under management.

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