As of Q4-22, the gross leasing number is 18.2 mn sq ft and over 80% of the year’s GLV is contributed by new leasing (70%) and Pre-commitments (11-12%), as opposed to the renewal of terms, it mentioned.
Anshul Jain, Head of Asia Pacific Tenant Representation and MD, India & Southeast Asia, Cushman & Wakefield, commented: “There are several positive indicators that suggest demand for office space will be strong through the year. The healthy GLV, as well as net absorption observed in Q4-22, indicates that the office market in India still has a lot of momentum left. Despite a mild recession foreseen, we are optimistic about India, and it is likely to remain largely unaffected.”
Nearly two third of the whole year GLV was recorded in the three megapolis of Bengaluru, Mumbai MMR, and Delhi NCR. These three cities also had a significant share in fresh leases, collectively accounting for 70% of annual new leasing across top-8 real estate markets in India.
The IT-BPM sector continued to dominate leasing activity during the year with a share of 28%, followed by Engineering & Mfg. (15%) and Flex Space (12%). The report observed that the top-3 sectors received a major boost post-Covid, either due to higher digital adoption or the government’s policy push.
The report highlighted that with nearly 13 mn sq ft of new supply, Hyderabad saw the most significant supply addition this year, followed by Bengaluru with 12 mn sq ft of supply. Together, these two cities accounted for nearly half (48.4%) of the Pan India supply for 2022.
Prime markets such as ORR & Whitefield (Bengaluru), Gachibowli & Madhapur (Hyderabad), Kharadi (Pune), and Golf Course Rd. & Extn. (Gurgaon) were recipients of the biggest chunk of supply in their respective cities. It’s been anticipated that in 2023, 64-65 mn sq ft of new supply will come in from the large tech cities of Hyderabad and Bengaluru.
As per the report, the Q4-22 net absorption figure continues to remain healthy at 9.8 mn sq ft for top-8 cities, almost in line with levels seen in the last two quarters. As a result, the full-year 2022 net absorption is standing at 36.5 mn sq ft, nearly in line with the forecast of mid-2022.
Bengaluru, with a 28% share, accounted for the lion’s share of pan-India net absorption for the year, followed by NCR (20%) and Hyderabad (15%). The large amount of supply that came in with pre-commitments, as well as the record number of fresh leases, were primary drivers of net absorption this year.
