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New Delhi: Office space absorption in six cities of India ie Bangalore, Chennai, Delhi-NCR, Hyderabad, Mumbai And Pune Registering a growth of 48.5% in 2022, stood at 54.8 million sq ft, as per the data Sevilles India, a real estate advisory firm. This was very close to the historic peak of 55.7 million sq ft recorded in 2019, down by less than a million sq ft.
Bengaluru registers its all-time peak at 17.3 million sq ft; And the same happened in NCR and Chennai at 11.3 million sq ft and 7.3 million sq ft respectively. Compared to 2021, new supply increased by 45.1% to 53.4 million sq. ft.
The company’s CEO Anurag Mathur said, “The bounce-back further establishes two things: that the flex space proposition is on solid ground, and secondly that there has been a tremendous return in office occupancy even for the tech sector.”
Pune and Chennai saw the highest annual growth in demand at 119% and 82%, respectively.
Bengaluru, Delhi-NCR and Chennai registered high leasing activity of 17.3 million sq ft, 11.3 million sq ft and 7.3 million sq ft, respectively.
Despite registering an all-time high demand in the first half of 2022, the second half slowed down, as if showing signs of a global recession. The H2 2022 performance leaves observers wondering whether 2022 would have broken all previous records but for a slump in the final quarter. Apprehensions regarding global growth prospects have clouded real estate decision-making, especially in the last quarter of the year.
IT is driving the office market to account for 38.9% of total leasing in 2022. With the increase in the adoption of hybrid working, the contribution of flexible workspaces is expected to increase from 12.7% in 2021 to 14.1% in 2022. Banking, financial services and insurance (BFSI) also maintained its pre-eminence at 12.2% share. Engineering and manufacturing, another important segment of demand, registered approx. 8.2% share of demand in 2022.
Of the 53.4 million sq ft of new completions across six key markets, Bengaluru and Hyderabad alone contributed to more than half of the supply. While the all-India stock of Grade-A office space stood at over 700 million sq ft, Hyderabad is set to cross the 100 million sq ft mark for the first time in 2022. Hyderabad, with 16.5 million sq ft to be supplied in 2022, witnessed a stupendous year-on-year growth of 92%.
The average vacancy level has increased marginally from 18.3% in 2021 to 18.9% in 2022 due to portfolio reallocation. As a result, fares have remained largely stable.
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