Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}

A Stellar 194% Growth in Office Net Absorption on a Quarterly Basis

Awantika Mohanty • 18/01/2022

A 36% increase on a yearly basis in leasing with PAN India gross leasing volume at 52.6MSF

  

  • The three megapolis cities – Bengaluru, NCR and Mumbai accounted for bulk ~60% of the leasing share 
  • The overall stock of Grade-A office space in India stands at 631 MSF as of Q4-21, a growth of ~2.0% over the previous quarter and 6.2% from last year same period
  • Demand for flex seats have been growing strongly with nearly 28,800 seats transacted in the Q4

Cushman & Wakefield released a report titled ‘India Office Market Beat’. According to the report, a strong recovery is underway in the Indian office space demand.  In Q4 2021, gross leasing stood at 16.2 MSF, which is 12.4% higher than Q3 2021 and 35.31% higher on a year-on-year basis. The three megapolis cities – Bengaluru, Delhi NCR and Mumbai accounted for bulk (~60%) of the leasing share.

 

City

Q4: Gross Leasing (Sf)

2021: Gross Leasing

(Sf)

Mumbai

2,861,345

10,424,573

Delhi NCR

3,584,982

9,892,715

Bengaluru

3,216,391

12,009,508

Chennai

1,915,497

6,360,280

Pune

2,296,574

4,957,168

Hyderabad

1,590,139

7,131,247

Kolkata

593,908

965,049

Ahmedabad

163,308

838,259

PAN India

16,222,144

52,578,799

 

Bengaluru’s contribution to PAN India leasing activity remained significant with the city accounting for a 20-25% share in both quarterly and annual gross lease volume. For Delhi/NCR, fresh leasing led the annual office demand with a 69% share, showcasing the improvement in occupier confidence. For the full year, GLV stood at 52.6 MSF at pan India level, close on the lines of what we had previously estimated of 50-51 MSF. This is an indicator to suggest occupiers are going ahead with expansion of office footprint citing recovery in business sentiments.

 

Sectoral share in leasing: Top three sectors that accounted for the largest share in leasing by volume includes IT-BPM (~30%), Flexible Workspace (19%), and Engineering & Mfg. (13%) sectors in Q4. Flexible workspaces share in volume has jumped significantly from quarterly average of 5.0% to a 19% share in the final quarter. Same three sectors account for the largest contributors when it comes to annual leasing volume too.

 

Net absorption stood at a record high with 9.8 MSF of quarterly demand entering the market in Q4, 2021 thereby registering a stellar 194% growth Q-o-Q and recorded a 58% growth Y-o-Y.  The growth in net absorptionreinforces our belief in the strong recovery that is underway in the Indian office space demand.

 

City

Q4: Net Absorption

(Sf)

2021: Net Absorption (Sf)

Mumbai

525,552

1,953,450

Delhi NCR

1,403,349

2,764,457

Bengaluru

3,524,636

7,656,701

Chennai

287,997

725,637

Pune

568,360

1,151,425

Hyderabad

3,165,647

5,581,838

Kolkata

176,908

451,369

Ahmedabad

153,945

723,197

PAN India

9,806,394

21,008,074

 

Nearly two-third of this demand came from just the two tech giant cities of Bengaluru and Hyderabad. For the full year 2021, net absorption remained intact from the previously estimated range at ~21 MSF. The report states that close to two-third of this demand came from India’s two tech giant cities - Bengaluru and Hyderabad. Occupiers are expected to go ahead with expansion of office footprint citing recovery in business sentiments as their motivator.

 

New Supply: The last quarter witnessed a large quantum of new supply hitting the market with 12.6 MSF coming in. Bengaluru, Pune and Hyderabad saw the highest supply during the quarter, both in terms of q-o-q growth as well as the absolute quantum of supply. With that, full-year new supply was recorded at over 38 MSF, slightly lower than our previous estimate of ~40 MSF. For the full year 2021, Hyderabad saw the largest addition of supply at 11.7 MSF, followed by Bengaluru. The two tech giant cities of India accounted for 57% of the new supply that entered the market in 2021. Owing to healthy pre-commitment levels in new supply, the vacancy rate did not see much impact. Overall, the India office market vacancy rose merely by 20-30 bps q-o-q in Q4-21.

 

Enterprise transacting in flex space hit a new high in Q4, growing strongly on the back of some occupiers trying to manage partial return-to-work of employees across many cities. With nearly 28,800 seats transacted in the fourth quarter, flex seat leasing shot up from an average of over 16,000 seats per quarter during Q1-Q3 period. Cities such as Bengaluru, NCR and Pune were the biggest contributors to flex seat take-up during the quarter. Corporates have been increasingly exploring flex space offices as it comes with benefits of shorter tenures, low capital investment, managed facility etc. Post pandemic, the demand for flex seats has been growing strongly. This explains the significant rise in office space take-up by flex operators in the fourth quarter.

 

Badal Yagnik, MD, Tenant Representation, India commented, “Despite a severe second wave in Q2-2021, India’s office leasing activity has been fast recovering lost grounds Q3 onwards. The sustained uptrend in demand during the fourth quarter as well as a testimony of occupiers’ belief in office as a destination for professional community building. Market indicators further suggest that this momentum will continue in the near future, and subsequent COVID waves will have only limited adverse impressions.”

 

Note: For more insights, please refer to our Office Market Beat Report.

Related News

Under Our Umbrellas: Little Artists, Big Story
Under Our Umbrellas: Little Artists, Big Story

For some time, food assistance has been the priority for most of our charity campaigns, with donated goods usually coming in the forms of instant noodles, rice packages, and condiments... During a crisis, these goods prove to be the best options to solve an immediate need. But life goes on after a crisis. 

01/07/2022

Catch 22 (image)
Asia Pacific Economy Forecast to Return to World-Leading Growth in 2022, Maintaining into 2023

The Asia Pacific economy is set to rebound in 2022 and regain top position in the second half of the year with an expected 4.5% real average annual GDP, according to Cushman & Wakefield’s latest report titled Catch ’22 - Asia Pacific Commercial Real Estate Outlook 2022.

Mandy Qian • 08/12/2021

China's 14th Five-Year Plan (image)
Cushman & Wakefield launch its THINK-IN report 2021- China’s 14th Five-Year Plan - What’s Next For Real Estate?

Cushman & Wakefield, a leading global real estate services firm, today released its THINK-IN report 2021 - China’s 14th Five-Year Plan - What’s Next For Real Estate.

Mandy Qian • 21/10/2021

Finance Sector (image)
The Finance Sector – Reforms and fintech to propel sector demand for leased office space in China

Cushman & Wakefield released its report titled The Finance Sector – Reforms and fintech to propel sector demand for leased office space in China.

Mandy Qian • 15/10/2021

Euromoney award (image)
Cushman & Wakefield Again Named Top Real Estate Advisor and Consultant Globally and in China by Euromoney

In the 2021 survey the firm was awarded a clean sweep of wins in China, Asia Pacific, and worldwide, in the four categories of Overall Agency, Valuation, Letting / Sales, and Research.

Mandy Qian • 16/09/2021

data center
Hong Kong's data center stands firmly in the market

Ranks the third most attractive data center location in APAC, Land supply increase through HSITP in the Lok Ma Chau Loop advisable

30/08/2021

Outlook 2021 Retail
China Retail Supply/ Demand 2021 - Retail dynamism drives the market

Cushman & Wakefield, a leading global real estate services firm, recently released its report China Retail Supply/Demand 2021.

30/08/2021

Nick Seaton and Dawn Koo
Cushman & Wakefield Promotes Two Senior Leaders in its Global Occupier Services Business in Asia Pacific

Nick Seaton and Dawn Koo’s promotions reinforce the growth of the firm’s integrated portfolio management services.

30/08/2021

Manufacturing Risk Index (image)
China Strengthens Position as Most Attractive Manufacturing Hub

China has strengthened its leading position as the most attractive manufacturing hub globally, according to Cushman & Wakefield’s 2021 Global Manufacturing Risk Index.

Mandy Qian • 18/08/2021

investment card
CRE investment activity back on the rise. Half-year transaction volume increased by 97% y-o-y

Industrial buildings and development sites being sought after - Hotels show potentials of long-term appreciation.

15/07/2021

Office-Leasing-Activity-Grows-CardImage
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
MORE OPTIONS
AGREE AND CLOSE
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
SAVE SETTINGS