JLL says there is 44% dip in net absorption of office space during 2020

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According to JLL in year 2019 net absorption crossed 46 million sq ft while in 2020 it has only reached about 25.82 million sq ft. In the present year net absorption of office space in top seven cities dipped by 44%.

According to JLL reserch,In Oct-Dec quarter absorption has improved to 8.27 million sq ft which previously low at 3.32 million sq ft in April-jun & 5.43 million sq ft in Jul-Sep quarter.

JLL India feels that in medium to long term demand for office market could be impacted by 20% as most of the office have opted for work-from-home concept which has been adopted as alternative during this period. Hyderabad has seen the higest net absorption in Q4 2020. While max increase in net absorption was witnesed in Mumbai, Delhi NCR & Chennai when compared to Q3 2020.

The dip will be balance through increasing demand for office space for sector that are at growth like healthcare, e-commerce & data center.

The chief economist and head of research & REIS, India,JLL Dr Samantak Das said"The year 2021 is expected to witness close to ~38-40 million sq ft of new completions, while net absorption is likely to hover around 32-35 million sq ft"

Workplace rents in 2020 remained stable across the essential office markets in india. With solid condo values, variety-bound vacancy levels and restrained upcoming grade A supply throughout key markets, the office market in india is still landlord favorable. Consequently, discount of headline rents isn't a popular phenomenon and rents are expected to remain stable in the brief to medium time period.

(Net absorption is a measurement of the net change of the supply of commercial space in a given real estate market over a specific period of time. It is measured by deducting commercial space vacated by tenants and made available on the commercial space market from total space leased up.)



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