Office space leasing grows 97% YoY in Q1 2022: Report

Office space leasing in India grows 97% Y-o-Y to about 11.4 million sq. ft. in Q1 2022 with Bangalore, Chennai and Delhi-NCR accounting for two-thirds of transaction activity, according to a report by CBRE South Asia. The report said that 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. 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 Bangalore, dominated large-sized deal closures. Supply witnessed in Q1 2022 was around 9.4 million sq. ft. – a slight dip of around 11% Y-o-Y and 41% Q-o-Q. Bangalore, Hyderabad and Chennai dominated development completions, accounting for a cumulative share of about 70%. Supply was driven by non-SEZ developments with a share of around 83%. “With the government’s evolving COVID-19 protocols and the recovery in office leasing in 2021, we expect the positive momentum to further strengthen in 2022. We continue to witness a pickup in long-term decision-making by occupiers, aided by ‘return-to-work’ strategies, thereby accelerating project completions,” said Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE. Renewals, renegotiations, and the addition of flexibility options are likely to be the focus of occupiers in the short term. CBRE expects to see clearer evidence emerging in any corporates’ intended to shift towards hybrid working policies, with several occupiers planning to implement policies allowing office-based working with the option of working remotely. With an increased focus on wellness, user experience and sustainability, occupiers are expected to demand more sophisticated and tech-enhanced real estate offerings. Source: The Economic Times