Office Leasing Activity in India Sees 9% YoY Growth in Q1 2023

According to the most recent official report from CBRE South Asia Pvt. Ltd, office leasing activity increased by 9% year over year and reached 12.6 million square feet between January and March of this year. Bangalore, Delhi-NCR, and Chennai accounted for 62% of the quarter’s total transaction activity.

Approximately 11.6 million square feet of development were recorded in Jan.–Mar. 23, an increase of 31% year over year. With a cumulative share of nearly 82%, Bangalore, Delhi-NCR, Pune, and Hyderabad led supply addition during the quarter. The non-SEZ segment dominated development completions with a share of around 88%, up from 82% in the same period last year. The report highlights the fact that almost 50% of the recently finished developments during the current quarter were green-certified (LEED or IGBC), demonstrating a strong emphasis on sustainability.

In the January-March quarter, BFSI companies and flexible space operators drove space take-up with a share of about 22% each, in contrast to the previous quarters where technology corporates predominated leasing activity. Technology corporations came in second, with 20% of the market, followed by engineering and manufacturing firms (11%), and research, consulting, and analytics firms ( 10%). Leasing activity in the January to March 2019 quarter was dominated by the closing of medium- to large-sized deals by global capability centers of BFSI corporates, Indian banks, and domestic flex operators. As compared to earlier quarters, this showed a divergence in office absorption trends. Due to a sharp rise in the number of large-sized deal closures, the combined share of BFSI companies and flexible space operators increased from 20% in Oct.-Dec. 22 to 44% in Jan.-Mar. 

Similar to the prior quarter, domestic companies outperformed American businesses in terms of quarterly leasing, accounting for nearly half of the leasing activity in the Jan.-Mar.’23 quarter. Flexible space operators, BFSI companies, and technology corporates were primarily in charge of this leasing activity.

Office space take-up in Jan.-Mar. 23 was primarily driven by small-to-medium-sized transactions (less than 10,000 sq. ft. to 10,000 – 50,000 sq. ft.), accounting for 84% of total take-up, a slight decline on a Q-o-Q basis. Greater than 100,000 square foot deals made up 6% of all transactions between January and March of this year, which is consistent with the prior quarter. Bangalore dominated large-sized deal closures from January to March of this year, followed by Delhi-NCR, Hyderabad, and Chennai. A few of these deals were also reported in Pune.

Follow and Connect with us: Twitter, Facebook, Linkedin, Instagram