Tata Realty aims to build 45 m sq ft office space in 7-10 years SHUBHRA TANDON Mumbai, August 11 TATA REALTY IS planning to build a strong office space portfolio. Its plans are in stark contrast totheratherbleak outlook on office real estate right now, given that more and more companies are willing to make work from home (WFH) a permanent feature, thus impacting office space demand. Tata Realty MD and CEO Sanjay Dutt, who is looking to build 45 million sq ft of office space over the next 7-10 years, believes otherwise. According to Dutt, the current scenario is similar to the global financial crisis when despite all the turmoil 19 million sq ft of office space was taken up by companies. "This year, between January and June around 11 million sq ft of commercial space has been committed and I believe another 10 million sq ft plus will be committed in the rest of the year, which means 20 million sq ft despite lockdown and concerns around WFH will still get committed in India, especially when there is no supply, which is great, Dutt told FE. Though this will be just about half of the 47 million sq ft of office space that was absorbed in the top eight cities of India in 2019, Dutt said the scenario will look up once the lockdown situation eases because the demand for quality A grade office space is intact, while there is a shortage of supply. Tata Realty has around six million sq ft of office space readyand leased and another one million sq ft is under construction and willbe ready by Novemberin Gurgaon. Dutt added thatthe company has plans approved for another 1.3 million sq ft of commercial spacein Mumbai,and as the lockdown situation improves,the company will start construction there. He furthersaid the company already has a large residential portfolio while 100% of commercial real estate is leased and the Tata Realty MD and CEO Sanjay Dutt company needs to do more there. "If I already have 13 sites and a large construction,there is no need for me to do more residential right now.However,itis not thatwe are stopping residential launches, it is just that we are also focusing on commercial, Dutt said. Headdedthata further 16 million sq ft of office space development will be done through existingland bank available with the company.In addition, Dutt said the company hassignedterm sheets across multiple cities which will give additional 22 million sq ft. "Because of the lockdown, due diligence has slowed down. Our goal will be to reach 45 million sq ftin the next 7-10 years, he said. Dutt added that the company is receiving almost 100% of rentalsand leaserentals have increased by around 14.8% in FY20. While the juryis still out on the future of office space demand, analysts believe that demandwill undoubtedly be subdued inthe near term but are sceptical about the dire projections regarding office space emanating from certain quarters. "The average space available per office employee has plummeted 56% over the past decade; this will have to reverse in the post-Covid-19 world, boosting office space demand, analysts at Edelweiss Securities said.