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Domestic ratings agency India Ratings and Research (Ind-Ra) has revised up its outlook on the commercial realty for FY23, saying the full resumption in the economic activities can revive demand for the sector. The outlook has been raised to ‘improving’ for FY23, from ‘neutral’ in FY22, anticipating an improvement in performance.

According to the report, the impact of the third Covid wave has receded and the relaxation in COVID-19 restrictions has led to resumption of offices in the hybrid mode and retail spaces opening steadily, which will lead to a gradual recovery and growth of the sector. Stating that there was a pick-up in leasing activity observed in the December 2021 quarter, it said it expects a 10-15 per cent jump in office leasing in FY23.

The report further said new leasing activity had declined to 25 million square feet (msf) in FY21 from 37 msf in FY20 on account of the remote working regime during the Covid-led crisis. However, leasing activities picked up in FY22, especially from the third quarter, and was at around 28 msf, registering a 12 per cent growth. It said rentals for office spaces in FY22 remained steady, with the resumption of economic activities post opening up of lockdown and there is a shift to Grade A realtors. It noted that the demand will also be driven by strong hiring across sectors like information technology, banking and insurance, telecom, pharma, retail, education, e-commerce, consulting and analytics, manufacturing, research and real estate.