Total monthly leasing activity down 56% MoM in January, but up 93% YoY

Total monthly leasing activity declined 56.4 per cent on a month-on-month (MoM) basis in January 2023, while it registered a 93.1 per cent increase on a year-on-year (YoY) basis.

The total monthly leasing activity for January in the calendar year 2023 (CY23) stood at 3.2 million square feet against 7.4 million square feet in December (CY22), according to JLL’s office lease tracker.

On expected lines, December 2022 saw significant deal closures, though the total leasing volumes were down by 12.5 per cent on a YoY basis. The total number of deals stood at 162 in January (CY23) as against 317 in December (CY22).

Fresh leasing, which also included expansion and relocation-driven space take-up, accounted for 87 per cent of all recorded transactions during the month.

According to JLL, the month of January is typically a slow period, as the holiday season for global corporations and future business planning take precedence, and most deals that slipped due to certain reasons get concluded during this month.

Delhi NCR, Chennai, and Mumbai accounted for around 77 per cent of monthly leasing activity in January 2023, according to the data. In terms of the number of transactions, Mumbai remained the most active market, followed by Delhi-NCR.

January’s aggregate leasing activity was sluggish but on expected lines as this period coincides with the festive/holiday season and future business plans being put together, with only spillover deals largely getting executed during this period, said Samantak Das, chief economist and head of research and REIS, India, JLL.

“As future business projections are made under the shadow of global headwinds and the tech sector, facing a period of course correction is likely to be slow in space take-up, we expect that rising office occupancies and growth in other occupier segments should keep the momentum steady,” Das said.

However, he also feels that an overall sluggishness is likely, but more sustained trends of demand movement will be visible moving ahead over the course of the next 2-3 months.

The IT sector is presently facing slower employment and sluggish corporate growth expectations, and as a result, space take-up may be more benign as part of a course news release correction. With evolving global economic scenarios, other occupier categories are anticipated to maintain a steady state, although with a minor downward bias in the short term.