7,400 office leases of 90 million sq ft up for renewal in top 6 cities in 2021

Industry data and Anarock Research reveal that over 7,400 leases spanning approximately 90 million sq ft area will come up for renewal in 2021 across the top six commercial real estate hubs: Bengaluru, Mumbai, Pune, Chennai, Gurugram and Noida. Data further reveals that 2021 has the highest lease expiry pipeline  compared to the next two years, 2022 and 2023. Year 2022 will see nearly 7,000 leases for approximately 78 million sq ft come up for renewal, and about 4,200 leases for over 55 million sq ft in 2023. 

Of the approximately 7,400 leases expiring in 2021, Mumbai has the highest share at about 44 per cent, followed by Pune with a 17 per cent share. These two cities have been among the worst-affected by the second wave. The impact on leasing activity there over the year bears watching.

The total number of leases coming up for renewal in 2021 accounts for 90 million sq ft area. Interestingly, in terms of area, Bengaluru has the largest share at about 37 per cent, with Mumbai coming in a distant second with a share of about 19 per cent. Of the total number of leases coming up for renewal in 2021, Chennai comprises a 5 per cent share; in terms of overall area, it has a 12 per cent share. Gurugram has a 15 per cent 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 per cent share of both total lease numbers and overall area.

“The office market has been under strain since the pandemic,” says Prashant Thakur, Director & Head-Research, Anarock Property Consultants. "However, the IT/ITeS sectors have been on a hiring spree in 2020 and 2021 due to massive business accruals. To accommodate these employees in a future when we see a gradual return of employees and adoption of hybrid workplace practices by Infotech giants, office space demand will grow. Office demand also is expected to gather momentum from 2022 in the wake of robust hiring by large corporates. These big corporates will definitely renew their leases, though some of the smaller companies may consider rationalising space.”