“As the second moratorium period ends in August, we hope that the government will make positive interventions such as one-time restructuring of loans for developers as well as extension of moratorium for retail loans (at least for home loans) to ensure liquidity and low default,” adds Baijal.

In the commercial office space, office supply came to a near standstill in Q2 2020 (April- June) with project completions declining 79 per cent YoY. In H1 2020, Mumbai and Chennai markets saw the most supply, accounting for 40 per cent of the total 17.3 million sq ft delivered during the period. The sharpest fall in supply was seen in the NCR and Pune markets, at 86 per cent and 87 per cent, respectively.

Sharp fall

Office leasing activity during Q2 2020 bore the brunt of the pandemic, and transaction activities fell 79 per cent. All major markets were impacted adversely: Pune was down 47 per cent YoY; NCR (45 per cent), Bengaluru (42 per cent) and Hyderabad (43 per cent). With two large ticket size deals comprising 1.8 million sq ft, Mumbai was relatively less impacted and reported 17 per cent de-growth in H1 2020. The sharper fall in transactions compared to new completions translated into a significant increase in vacancy level to 14.1 per cent in H1 2020, from 12.7 per cent in H1 2019, says the Knight Frank India report.

“With economic uncertainties creating significant headwinds, we expect the office space take up to remain cautious. Most occupiers are expected to hesitate in committing to expansion in the current market scenario and may delay their leasing decisions for later. Occupiers are also devising the best formula for office occupancy for their near-term future to accommodate the impact of Covid-19 and lockdown such as social distancing, restriction in movement, etc. For the office market, it will be a wait and watch till a more permanent solution to this pandemic is found,” says Baijal.

Despite the low volume of transaction, the weighted average rental for the eight cities during H1 2020 reported a growth of 4 per cent, primarily attributed to a 5.6 per cent per cent rental growth in Bengaluru, which also experienced the most transaction activities during the period. The sharpest fall in office rental was seen in NCR (8.8 per cent ) and Ahmedabad (12.1 per cent).

The sectoral share of office transactions remained comparatively intact with IT dominating 43 per cent of overall transactions, followed by BFSI at 16 per cent. Two sectors, co-working and other services managed a share of 14 per cent each, while manufacturing had a pie of 16 per cent.