Commercial Realty: Post- pandemic Trends and Growth prospects in India 2021

With the drop in Covid cases, residential sales have risen again, and commercial real estate has shown some signs of revival.

Like the first, the second wave of the pandemic has impacted both residential and commercial real estate markets. The result, however, was limited since all were more prepared this time. Thankfully, with the drop in Covid cases, residential sales have risen slightly again, and commercial real estate has started to show signs of rebirth as well.

Commercial real estate is gaining traction in its main cities, fueled by the IT/ITeS sectors. As per JLL research, India’s overall net office uptake in the second quarter was 4.39 million sq. ft., up 32% YoY in key cities. However, net intake in the second quarter, the net office uptake declined by 16% compared to the previous quarter due to the nationwide lockdowns. 

However, the quarter-on-quarter loss was smaller than the 61% drop during the same period last year when the pandemic’s first wave hit, proving the market’s improved resiliency, according to the report.

The Pandemic & the Commercial Realty

An Anarock report shows, 7,400 office leases totalling 90 million square feet are available for restoration and renewal in the top six cities in 2021. 

In addition, many IT companies are on a recruiting binge as their entire business accelerates due to the pandemic. “This finally bodes favourably for overall office space requirements in 2022 and 2023, when we may see a gradual return to normalcy alongside the newly increased workforce. 

The IT/ITeS sectors are significant drivers of overall leasing activity in major cities. The research argues that “mass employment by these enterprises will influence demand for large quality office spaces.”

Also, similar to the future attitudes of real estate sector stakeholders, the outlook for the commercial office market in Q2 2021, for both leasing and rentals, has been positive, according to the 29th Edition of the Knight Frank-FICCI-NAREDCO Real Estate Sentiment Index Q2 2021. 

After outlasting the lockdown-induced pause in the second quarter, offices have started to reopen across the country. In the coming six months, stakeholders expect increased office market activity, boosted by the recent relaxing of lockdowns and movement restrictions.

Demand for office or dispersed commercial portfolios would grow as a result of a consolidation trend and the expansion of satellite offices using the hub and spoke model,” says Dr Niranjan Hiranandani, National President of NAREDCO and MD of the Hiranandani Group.

Post-Pandemic Growth Prospects of Commercial Realty 

The majority of developers are now bullish on the commercial market’s growth prospects. “The leasing market in Delhi-NCR is expected to increase by 20-25% in 2021; the majority of activity occurs in the second part of the year,” says the report. says the report. Demand is likely to be boosted by technology, BFSI, consultancy, and manufacturing occupiers. 

“The Delhi-NCR area has an 8.5 million sq ft supply pipeline, with Gurugram expected to finish moreover half of it and Noida the rest,” says Sachin Gawri, Founder and CEO of growing Infraventures Ltd.

Greater mall hours in some places, a revival of food and beverage demand, and increased expenditure all contributed to the rapid recovery that began in the third quarter of 2020. 

Greater mall hours in some places, a revival of food and beverage demand, and increased expenditure all contributed to the rapid recovery that began in the third quarter of 2020. As a result, commercial real estate may continue to be the preferred choice of investors due to its potential for expansion and guaranteed economic returns.

“In the previous year, particularly after Covid 2020, we have seen a significant increase in commercial project demand in Noida. And once again in 2021. Following the initial shocks in April and May, economic activity in all sectors began to pick up in June 2021, primarily to lowering infections and minor relaxations in lockdowns, both of which are crucial for increasing employment and income stability. 

Nevertheless, the fact that customers have begun to consider real estate as a means of stabilising their financial condition is promising,” adds Ajendra Vikram Singh, VP-Sales at Spectrum Metro.

Individual and institutional investors are increasingly attracted to commercial realty as an alternative investment. As a result, private equity flows into the commercial market have surged significantly. According to Savills, the first half of 2021 saw around 41% of the investment inflows recorded in the entire year of 2020, indicating that investor confidence remains robust.

However, office leasing fell to a six-year low in the first half of 2021. However, with increased vaccine coverage and economic activity gradually returning to normalcy, the year’s second half looks hopeful for both the office and retail sectors. In addition, PEs have shown a keen interest in the office and retail sectors, showing that this asset class will remain steady in the future. 

While a rapid reversal in demand is unlikely, vacancy numbers are expected to reduce in the coming quarters as physical workplaces reopen, and visitors return to malls. Moreover, according to recent statistics, customers intend to boost their discretionary spending,” says Siddharth Katyal, Director (Planning & Strategy), Omaxe Ltd.


Even if 2021 is not immune to pandemic consequences, the groundwork for a sector-wide recovery has been built. “Recent Indian REIT listings are expected to strengthen developers’ ability and ambition to build more commercial properties, leading in higher liquidity inflows into the commercial real estate asset class.” Existing lease collections were largely unaffected, with no substantial difficulties in collecting billed rentals. The scenario will be different after this Unlock since offices will continue to operate following immunisation. They are more likely to follow COVID policy to minimise further business interruptions. As a result, we anticipate robust leasing activity in the year’s final six months,” says Uddhav Poddar, MD of Bhumika Group. So, the juices have started to flowing back again; let’s wait and witness the change!