Summary:

Driven by strong demand from GCCs, the BFSI sector, and manufacturing, net leasing of Grade A offices in India is expected to rise by 10-12%, reaching pre-pandemic levels of 41-43 million square feet. This increase will help minimize growing vacancy rates while improving cash accruals and credit profiles for real estate firms.

CRISIL Ratings anticipates a revival in net leasing after four years of gradual recovery, with significant office supply expected to remain. GCCs are likely to account for 40-45% of leasing due to competitive rates and skilled labor in cities such as Bengaluru and Hyderabad. Vacancy rates are projected to stabilize around 17.4-17.5%, though strong demand from the IT, engineering, manufacturing, and BFSI industries will persist. The amendment to the SEZ Act enhances cash accruals and credit profiles, although economic slowdowns may impact leasing.

Source: IBEF 

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