Blackstone Group’s Nucleus Office Parks has revised its leasing guidance upward for the year led by a robust uptick observed in demand owing to a strong revival in the business environment post the Covid-19 pandemic.
Nucleus Office Parks CEO Quaiser Parvez told the media that the large-scale hiring across major sectors and return to the office are already pushing the demand for office space. In the market, most of the occupiers are looking for offices for their expansion now.
The company has leased over 5.3 million sq ft space, including renewals across its office parks in major property markets of the country in the last two quarters. Nucleus Office Parks expects to convert demand of at least 3 million sq ft this year based on the demand and enquiry levels.
Parvez told the media that over 60% of occupiers are looking for space for expansion, now as against about 18% to 20% in May 2021. The average size of the transaction has grown from 26,000 sq ft to 40,000 sq ft. The average size of suppliers’ buildings is also varying from 320,000 to 400,000 sq ft. All of these factors are showing that commercial real estate will shape up strongly from here.
Nucleus Office Parks’ current portfolio comprises over 17 million sq ft of Grade A commercial office spaces spread across 13 marquee assets in Mumbai, the National Capital Region (NCR), Chennai, Bangalore, and Ahmedabad. It will be adding 1.5 million sq ft office spaces to this portfolio, including 9 lakh sq ft in Lower Parel in Mumbai and 6 lakh sq ft in Gurgaon by June.
Parvez believes the Indian office market is likely to witness a rebound driven by record hiring, expansion in the IT-enabled services sector, information technology, and other sectors, including flexible workspace providers and life sciences.
As per the Knight Frank India data, in 2021, office space absorption across the top 8 cities of India stood at 38.1 million sq ft, of which nearly 26 million sq ft was transacted during the second half of the year, marking a recovery in demand for office properties.
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