Gross office space leasing across nine major cities rose 16 per cent to 41.1 million square feet during the last year, driven mainly by higher demand in Hyderabad, real estate consultant CBRE said on Friday.
Office space leasing or absorption stood at 35.4 million square feet during 2020, while the new supply was 42.1 million square feet.
“The physical office would be more effective for occupiers in India in supporting employee engagement, collaboration, team productivity and innovation, relative to remote working,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE.
While office utilisation rates across cities would fluctuate in tandem with infection rates owing to new variants (Omicron), he believed that occupiers would encourage employees to come back to offices, with their safety and well-being at the forefront of their ‘return to work’ plans.
CBRE noted that the technology corporates drove leasing with a share of 30 per cent, followed by flexible space operators (15 per cent), engineering and manufacturing companies (14 per cent), BFSI (13 per cent) and life sciences firms (6 per cent).
According to the data, office leasing in Delhi-NCR rose slightly to 5.6 million square feet in 2021 from 5.5 million square in 2020.
In Mumbai, the office absorption increased to 4.1 million square feet from 2.8 million square feet.
The office space leasing in Bengaluru rose to 12.4 million square feet from 10.9 million square feet.
In Chennai, the office space leasing fell to 3.8 million square feet to 4.2 million square feet.
Hyderabad saw absorption of 10.8 million square feet last year as against 7.1 million square feet in 2020.
The absorption of office space in Pune fell marginally to 3.4 million square feet from 3.5 million square feet.
Kolkata also saw marginal rise in leasing to 0.6 million square feet from 0.5 million square feet, while absorption in Kochi stood flat at 0.1 million square feet.
In Ahmedabad, the leasing fell to 0.3 million square feet from 0.8 million square feet.
New supply grew 18 pc last year to nearly 50 lakh square feet.
With the addition of new supply, CBRE said that the total office stock in the country has crossed 773 million square feet.
Hyderabad, Bengaluru, and Delhi-NCR drove supply during the year, accounting for a cumulative share of about 70 per cent.
Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India said, We believe that the advent of hybrid working would change the future role of office as a centre of employee collaboration. “
As economic recovery continues to gain momentum, he said the concerns about the viability of hybrid working models would further ease.
CBRE also highlighted that the office sector continued to attract both institutional investors and developers during the year, with nearly USD 1.4 billion worth of capital deployed.
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