Office transactions across top 8 cities surge by 80 per cent in Q3
Home sales volume jumps by 2.5 times to 33,403 units in Q3 2020 compared to 9,632 units in Q2, shows Knight Frank research
Hyderabad: Office leasing across the top eight cities of India witnessed a strong recovery, registering 80 per cent growth to 0.44 million sqm in Q3 2020 (July-September). New office completions saw a recovery of 126 per cent to 0.33 million sqm, compared to Q2 2020, according to the latest Knight Frank report.
Total office transactions of prime cities in Q3 2020 improved and reached 33 per cent of the 2019 quarterly average level. Chennai, NCR and Mumbai recorded higher recovery in Q3 2020 with transactions reaching the level of 57 per cent, 43 per cent, and 42 per cent respectively of the quarterly average of the year 2019. New completions also improved to 29 per cent.
In terms of rental values, the recovery in office transactions and new completions helped rental values remain stable in Bengaluru (4 per cent) followed by Hyderabad (2 per cent) year-on-year (YoY) growth.
According to Shishir Baijal, CMD, Knight Frank India, “The commercial office asset class performance for the third quarter has been encouraging especially when benchmarked against quarterly average of 2019 as office transactions were at a historic high in that year. At the beginning of the pandemic in India, businesses were compelled to move to work from home as a business continuity process method.”
He further added, “The uncertain business environment that followed the initial lockdown, further caused occupiers to assess their office space strategies leading many to postpone their office expansion plans till Q2 2020. However, with the unlocking in progress, going forward as India edges back economic recovery, the office market dynamics are also expected to improve.”
Home sales
Knight Frank estimates that home sales volume jumped by 2.5 times to 33,403 units in Q3 2020 compared to 9,632 in Q2 2020. New residential unit launches increased by 4.5 times to 31,106 units in Q3 2020, compared to 5,584 units in the previous quarter.
Weighted average prices in Q3 2020 registered a Y-o-Y decline in the range of 3-7 per cent in six of the eight markets. Hyderabad and Bengaluru were the only markets that witnessed a price increment of 4 per cent and 3 per cent, respectively, as developers in these predominantly end-user markets sustained pricing power in a favourable demand-supply scenario.
As most of Q2 2020 (April – June) remained under lockdown due to the continuing pandemic, both sales and supply volumes saw record low levels in this quarter. The total residential sales of the top eight markets under review during Q3 2020, reached 54 per cent of 2019 quarterly average. Similarly, residential launches in Q3 2020, improved to 56 per cent of the 2019 quarterly average.
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