New supply of office space rose 49 per cent during January-September period across six cities to 32.8 million square feet on completion of many commercial projects to meet rising demand, according to Colliers India.
Real estate consultant Colliers India said that the same stood at 22 million square feet in the year-ago period across six cities — Bengaluru, Chennai, Delhi-NCR, Hyderabad, Pune and Mumbai.
Fresh supply declined in Bengaluru and Mumbai, but rose in other four cities.
As per the data, the new office supply declined 1 per cent to 8.1 million square feet in January-September 2022 from 8.2 million square feet in the corresponding period of the previous year. Mumbai saw a 16 per cent decline in new supply to 1.8 million square feet from 2.1 million square feet.
Among cities that saw uptick in supply, the fresh supply of new office in Chennai jumped to 4.2 million square feet from 0.9 million square feet.
Delhi-NCR witnessed a 133 per cent growth in new supply to 6.3 million square feet from 2.7 million square feet.
New supply of office space in Hyderabad rose 56 per cent to 7.9 million square feet from 5.1 million square feet.
Pune witnessed a 49 per cent rise in fresh supply to 4.5 million square feet during January-September 2022 from 3 million square feet in the corresponding period of the previous year.
The gross leasing of office space nearly doubled to 40.6 million square feet during January-September across six major cities on pent-up demand driven largely by technology and co-working firms. The absorption of office space stood at 20.6 million square feet in the year-ago period across six cities.
Colliers India expects absorption of office space to hit an all-time high in the 2022 calendar year, with gross leasing set to cross 50 million square feet. The previous high was seen in 2019 at 44.8 million square feet.
Gross absorption does not include lease renewals, pre-commitments and deals where only a letter of intent has been signed.
As a result, Colliers India reported that vacancy levels declined to 16.7 per cent from 18.5 per cent in the March quarter led by robust demand amidst limited new building completions. Higher enquiries and pre-commitments are likely to keep vacancy levels range bound in the next three months.
“The growth story for Indian office market continues with robust space take up in the first three quarters of 2022. The flight to quality and further evolution of workspace utilisation, combination of hybrid and remote working where the innate thought is to bring back the social and people aspect of office environment,” said Peush Jain, Managing Director – Office Services of Colliers India.
“The attractiveness of Indian market would provide tailwind to demand in the last quarter as we move cautiously to 2023,” Jain said.