Demand for office space across India’s top six cities is likely to decline 18-22% in 2023, primarily due to the higher base effect from the previous year and delays in decision making by corporates related to their expansion plans, according to a joint report by Credai and CRE-Matrix. The report has estimated that the fresh leasing of Grade A premium office space stood at 55-57 million square foot (msf) in 2023. The data excludes renewals. The absorption of office space was 70 msf during 2022.
During the first nine months of 2023, the leasing activities have already touched 41.8 msf across six major cities, which include Delhi-NCR, Mumbai Metropolitan Region (MMR), Bangalore, Pune, Chennai and Hyderabad. As per the data, the demand for office space was highest in Bangalore at 10.5 msf during January-September, followed by Delhi-NCR at 8.6 msf, Hyderabad at 6.8 msf, MMR at 6.7 msf, Pune at 5.1 msf and Chennai at 4.1 msf.
The report highlighted that the Grade A office space stock is 770 msf at the end of the third quarter of this calendar year (Q3 2023). The vacancy level is 17.4%. IT/ITeS, BFSI and co-working sectors drove two-third of office demand at a pan-India level. Among occupiers of office space, IT/ITeS sector accounted for 35%, BFSI for 17% and co-working for 14%. The demand for flexible workspace has risen sharply after the COVID pandemic.
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Dhwani is a content management expert with over five years of professional experience. She has authored articles spanning diverse domains, including real estate, finance, business, health, taxation, education and more. Holding a Bachelor’s degree in Journalism and Mass Communication, Dhwani’s interests encompass reading and travelling. She is dedicated to staying updated on the latest real estate advancements in India.
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