As anticipated at the beginning of the year, 2022 witnessed a strong recovery from the previous 2 years. A historic high gross leasing volume of over 71 msf was recorded, largely backed by sustained demand recovery that got broad-based to include mid-tier companies going ahead with their footprint expansion plan.
professional services continued to lease high volumes of space, this year they were accompanied by companies in the flex space, industry, and engineering & manufacturing sectors.
The developers realized the pent-up demand for commercial office space across major cities. They contributed to the market momentum by expediting supply that had speculative pre-commitments, while also fast-tracking the construction of speculative developments. It is expected that headwinds may not last long in 2023, and for the moment sentiments amongst occupiers in India remain optimistic.
In this report, we look at the benchmarks set in 2022, that the future that awaits the India Office Market.
Key Highlights Q4 2022:
- 18.2 msf of gross leasing volume (GLV) in Top 8 cities in Q4 2022, growing by 5% q-o-q and 17% yoy
- Bengaluru was the leading market and accounted for a 29% share, followed by Mumbai, Delhi NCR and Chennai with shares of around 25%, 20% and 9% respectively.
- IT-BPM accounted for highest share (~28%%) in quarterly leasing followed by engineering & manufacturing and BFSI (12% each) and professional services (10%)
- Supply declined by around 53% on a q-o-q basis. New completions of 7.4 msf were recorded in Q4 2022 with Bengaluru accounting for over a third, followed by Delhi NCR (21%) and Hyderabad (18%).
- Net absorption in Q4 2022 stood at 9.8 msf, broadly in line with the previous quarter.