Of 90 mn sq ft area commercial leases up for renewal in 2021, Bengaluru has the highest share at 37%
Offline vegetable shops in various parts of Bengaluru were also running out of stock.
Over 7,400 leases accounting for approximately 90 mn sq. ft. of commercial real estate area in the top six commercial real estate hubs - Bengaluru, Mumbai, Pune, Chennai, Gurugram and Noida - will be due for renewal this year. Of this IT capital Bengaluru has the highest share at 37%, a new report has said.
The total number of leases coming up for renewal in 2021 account for 90 mn sq ft. area. Interestingly, in terms of area, Bengaluru has the largest share at about 37%, with Mumbai coming in a distant second with a share of about 19%, an analysis by Anarock has said.
Of the total number of leases coming up for renewal in 2021, Chennai comprises a 5% share - in terms of overall area, it has 12% share. Gurugram has a 15% share each in terms of number of leases due for renewal and total area. Noida has the least number of leases due for renewal, comprising a mere 3% share of both total lease numbers and the overall area.
Bengaluru's office real estate market has been under strain since the COVID-19 pandemic started. While there was some momentum seen in the first quarter of 2021, the second COVID-19 wave in the April-June quarter saw much of it eroded, an analysis by Anarock has said.
For now, most IT/ITeS companies have extended the work-from-home option for now and are waiting for things to change in favour of the previous status quo.
However, factoring in the gradual return of employees and adoption of hybrid workplace practices by major IT/ITeS firms, Bengaluru's office space demand is set for growth again as these companies will assuredly renew their leases, it said.
As for residential real estate,Bengaluru saw property prices rise by 2% from Rs 4,975 per sq. ft. in Q1 2020 to Rs 5,060 per sq. ft. in Q1 2021. This was the highest price rise among the top 7 cities, and it happened primarily because the city continued to see steady growth in housing sales q-o-q, the analysis said.
Amidst restricted new supply, ANAROCK data reveals that Bengaluru saw total sales of approx. 8,670 units in the first quarter of 2021, while its unsold inventory declined by 7% in a year - from approximately 62,800 units in Q1 2020 to approx. 58,350 units in Q1 2021.
In Bengaluru, the affordable and mid-segments are driving residential demand.
Unfortunately, the reduction in stamp duty in Karnataka announced in March of 2021 was only for homes valued between Rs 35 lakh to Rs 45 lakh. This reduction has, so far, not given a significant boost to housing sales in Bengaluru on the lines seen in Mumbai and Pune, it added.