With the quarter witnessing the highest quarterly gross leasing for a few listed players, coupled with expectations of rising demand for office space, it is positive for listed commercial developers as well as real estate investment trusts (Reits).
The recent rules on special economic zones (SEZs) and increasing lease activity by global capability centres (GCCs) are expected to boost both occupancies and rentals going ahead. This will not only benefit pure-play commercial asset owners such as the four listed Reits but also developers with significant office portfolios, such as DLF and Brigade Enterprises.
The immediate trigger for the stocks is the strong performance in the October-December quarter, as well as calendar year 2023 (CY23). The recovery in demand for office space has benefited Reits, as gross leasing saw an improvement in the quarter. Both Embassy Reit and Brookfield Reit posted their highest-ever quarterly gross leasing since their initial public offering.
The worry for the sector has been a significant quantum of exits, largely due to slowdown concerns in the software and information technology-enabled services (ITeS). This has resulted in net leasing (new leases less exits) being in the negative.
However, while exits have continued, the pace of the same has reduced, and all major developers have reported net leasing to be in positive territory in the quarter.
Bu hikaye Business Standard dergisinin February 26, 2024 sayısından alınmıştır.
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Bu hikaye Business Standard dergisinin February 26, 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
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