Indian Commercial Real Estate Improves as Office Leasing Rises Three Times in Second Quarter of 2022

The demand for offices on rent in India has seen a marked improvement in the past 3-4 months. As people get over the work from home execitement and compulsion, the number of actual office workers is steadily increasing and the video call fatigue is clearly showing. 

Real brick and mortar offices are back in demand!!

According to a survey by Colliers India, the top six cities in India witnessed virtually the same amount of office gross absorption. an increase of three times, to 14.7 million square feet during the second quarter of 2022.

in contrast to the same time of the previous year. The positive trend that began at the beginning of the year carried over into the second quarter, where it remained uninterrupted and increased by 14 per cent.

In the first half of the year, across India office absorption has already exceeded 27 million square feet, indicating a robust rebound in occupier demand. Every important one

Strong leasing activity was seen across markets all during the quarter, driven primarily by robust tenant demand for big office spaces.

The leasing market share was led by Bengaluru real estate market, which accounted for 30 per cent of the total, followed by Mumbai, which stood for 19 per cent of the whole, and Delhi-NCR, which accounted for 18 per cent of the total share.

Overall vacancy rates fell by 100 basis points during the second quarter of the year as a result of increased demand coupled with a continuous intake of quality supplies.

2022 at 17 per cent.

This change in direction has occurred over a protracted period of time—nearly ten quarters—since the beginning of the epidemic. In terms of new supply, the quarter witnessed an addition of 9.4 million square feet to Grade A stock. This is a two fold increase compared to the second quarter of 2021. The largest part, forty percent, was taken by Hyderabad, and then Bengaluru came in second (17 per cent).

The technology and flex space occupiers who are actively leasing new spaces lead the way for leasing in bigger areas. The fact that 47 percent of all leasing during the quarter consisted of large agreements (those that were more than one lakh square feet) is evidence that occupiers have robust growth aspirations. More than sixty percent of the renting was done by transactions of a significant scale came out on top in both the Hyderabad and Bengaluru IT marketplaces.

It is interesting to note that consultancy and BFSI businesses also made a comeback and leased about 3.5 million square feet of space during the quarter, contributing one-fourth to the total amount of space leased.

The demand for flexible office space is expected to stay strong as occupants continue their search for fully managed and technologically advanced smart workplaces. Insist on products of high quality.

The demand for Grade A buildings is expected to increase since occupants choose new workplaces that are in superior locations, are more accessible, and come fully equipped with amenities.

As the normalcy of working from an office returns, the demand for commercial spaces will go on increasing and that is surely good news for commercial real estate in india.