New office space supply across top seven cities to exceed 165 million sq ft between 2023-2025: Report

October 12, 2023

NEW DELHI: Office supply completions across the top seven cities i.e. Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune are expected to exceed 165 million sq ft between 2023-2025, which is significantly higher than 142 million sq ft recorded during the 2020-2022 period, according to a recent report by CBRE South Asia, a real estate consulting firm.

Bengaluru and Hyderabad will continue to dominate this upcoming office space supply, accounting for nearly half the overall supply between 2023-2025.

“The average annual office supply increased by a robust 17%, and the average building size increased by a significant 18% over the three-year period from 2020 to 2022. This growth is expected to further accelerate by 15-18% during the next three-year period from 2023 to 2025,” said Anshuman Magazine, chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE.

Between 2023-2025, Bengaluru will lead the office space supply, accounting for 29% of the total supply in India, followed by Hyderabad at 20%, Delhi-NCR at 17%, Pune at 12%, Chennai at 11%, Mumbai at 9% and Kolkata at 2%.

New office development completions in Bangalore will be concentrated in the Outer Ring Road, North Business District area, while in Hyderabad IT Corridor II, Extended IT Corridor will see most of the new completions. Delhi-NCR’s new office space completions will be dominated by the Expressway, Golf Course Road extension, while Pune will see most completions in Peripheral Business District NE, South Business District NW.

Upcoming new office supply in Chennai will be mainly witnessed in OMR Zone 2, MP Road, while in Mumbai, it will be in the Navi Mumbai Business District, EX Business District, and Kolkata, new office supply will be primarily in the Peripheral Business District, South Business District.

“Investment in India by foreign investors increased by a strong 80% year-on-year to touch USD 2.8 billion in 2022, making it the only market in the entire APAC region to witness annual growth in capital deployment,” said Ram Chandnani, managing director, Advisory & Transactions Services, CBRE India.

Despite prevailing economic conditions, IT expenditure in India is expected to remain robust throughout 2023. This resilience is attributed to corporations’ continued focus on enhancing employee productivity, improving customer experiences, and optimizing operations. The demand for office space was primarily driven by BFSI, technology, and pharmaceutical companies, accounting for a ~50% share in Jan-Sep 2023, with expectations of sustained leasing activity in the long term.

  • Published On Oct 12, 2023 at 04:30 PM IST

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