Office leasing set to rise 52% this year across top 6 cities; demand may drop 30% in 2023: Colliers India
Leasing of office space across six major cities is likely to rise 52% to 50.1 million sq. ft in 2022 on better demand but absorption may fall to 35-38 million sq. ft next year with corporates being cautious, according to Colliers India.
According to its data, the gross leasing of Grade-A (premium) office space in 2022 is expected to rise 52% to 50.1 million sq. ft from 33 million sq. ft last year across six cities – Bengaluru, Mumbai, Delhi-NCR, Chennai, Hyderabad and Pune.
“Occupiers have been optimistic about their future workplace needs, after a gap of two years, and were snapping up office space across the top Indian cities,” Colliers said in a statement.
Among these six cities, office space leasing in Bengaluru is estimated to rise 66% to 16.3 million sq. ft in 2022 from 9.8 million sq. ft last year.
Chennai is likely to see a 64% increase in office leasing to 4.6 million sq. ft from 2.8 million sq. ft, while Delhi-NCR may witness a 40% growth to 8.8 million sq. ft from 6.3 million sq. ft earlier.
Office space leasing in Hyderabad is likely to rise 29% to 7.6 million sq. ft from 5.9 million sq. ft.
In Mumbai, the leasing is expected to rise 59% to 7.3 million sq. ft from 4.6 million sq. ft. Pune may see a growth of 53% to 5.5 million sq. ft in 2022 from 3.6 million sq. ft in the previous year.
“The year 2022 is likely to be a landmark year in commercial office real estate. Collaborating, brainstorming and creating a dynamic culture are the three pillars of any workplace post-pandemic,” Colliers India CEO Ramesh Nair said.
“During 2023, slow decision-making could result in leasing activity of about 35-38 million sq. ft. In 2023, Bengaluru followed by Hyderabad is expected to see most of the new supply across the top six cities,” he added.
Peush Jain, Managing Director, Office Services, Colliers India, said that market fundamentals continue to remain strong.
“At this time, real estate players should prioritize long-term stability and creating stronger portfolios, focusing on aspects such as ESG and zero-carbon strategy. The future of real estate will require some recalibration from traditional practices to sustain and grow in this constantly evolving market,” he said.