Bengaluru registered the highest share in leasing at 30 per cent, according to the latest release by Colliers India. The gross office absorption across the top six cities saw almost a three-fold rise to 14.7 million square feet during Q2 2022 compared to the same period last year.
“Absorption in the first two quarters of the year has already surpassed more than 80 per cent of the total absorption seen in the whole of 2021. Office demand is headed to close at 40-45 million sq ft by the end of this year. Rentals are also likely to firm up in the next two quarters as the occupancy levels rise,” said Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers.
The surge has been led by rising demand paired with a steady influx of quality supply; overall vacancy rates declined by 100 basis points during Q2 2022 to 17 per cent. This trend reversal has come after a long haul of nearly ten quarters since the onset of the pandemic, said the release.
Pan-India absorption has surpassed 27 million sq feet in the year's first half, signalling a revival in occupier demand. The major markets saw strong leasing activity during the quarter, driven by high occupier demand for large office spaces. Other cities that showed growth in leasing space include Mumbai (19 per cent) and Delhi-NCR (18 per cent).
In terms of new supply, the quarter saw an addition of 9.4 million sq feet to Grade A stock, a two-fold increase from Q2 2021. Hyderabad grabbed the highest share of 40 per cent in total supply during the quarter, followed by Bengaluru at 17 per cent share.