NEW DELHI: The office sector in India continued to witness a robust recovery in Q1 2022, as leasing activity grew by 97% year-on-year to touch 11.4 million sq. ft, according to report by CBRE South Asia, a real estate consulting firm.
Bengaluru, Chennai and Delhi-NCR dominated absorption during the quarter, accounting for almost two-thirds of the transaction activity. Technology corporates drove leasing with a share of about 34%, followed by BFSI firms (17%), flexible space operators (13%), engineering & manufacturing (12%) and research, consulting & analytics (11%) firms.
Anshuman Magazine, chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE said, “We continue to witness a pickup in long-term decision-making by occupiers, aided by ‘return-to-work’ strategies, thereby accelerating project completions.”
The report further highlighted that office space take-up was driven by small- (less than 10,000 sq. ft) to medium-sized (10,000-50,000 sq. ft.) transactions with a share of around 84%. Pune and Chennai, followed by Delhi-NCR and Bengaluru, dominated large-sized deal closures.
Ram Chandnani, managing director, Advisory & Transactions Services, CBRE India said, “As economic recovery continues to gain momentum, we expect the increase in leasing activity to bring a new focus on large-sized and high-quality buildings by developers to differentiate their assets and attract occupiers. We also expect large institutional players to continue with greenfield investments via JVs / partnerships / platforms or brownfield investments via REITs, which in turn would also boost the upcoming supply in the coming years.”
Supply witnessed in Q1 2022 was around 9.4 million sq. ft a slight dip of around 11% year-on-year and 41% quarter-on-quarter. Bengaluru, Hyderabad and Chennai dominated development completions, accounting for a cumulative share of about 70%.