Mindspace Reit sees India office rentals rising on supply crunch

Mumbai

MINDSPACE Business Parks Reit, which runs office complexes across 4 big Indian cities, expects rentals to rise on tighter supply of new high-quality office assets, according to the company's chief executive officer.

The company is witnessing an increased volume of leasing by technology, financial services and fintech firms, CEO Vinod Rohira said in an interview to Bloomberg Television on Tuesday (Nov 23).

Most real estate developers are moving to construction of residential projects amid a revival in demand for new homes, creating a vacuum for Grade A offices.

While supply for office spaces is getting thinner, demand is rising amid economic recovery in India - strong hiring by technology firms and return to offices as majority of country's workforce gets fully vaccinated.

Office leasing activity reached 13.5 million sq ft in the quarter ended September, more than double from previous quarter, according to a report by property service firm CBRE.

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The Reit leased 2.1 million sq ft of office space in the first half of the fiscal year that started in April. It expects further rise in demand for leasing in the next quarter, as employees start returning to offices after nearly 2 years of working from home.

Mindspace currently has 1.8 million sq ft of office assets under construction, which it hopes to get completely leased in next couple of quarters. Another 2.3 million sq ft of offices are planned to be constructed in Pune and Hyderabad as these cities see traction in leasing, Rohira said. BLOOMBERG