Bengaluru sees 28% fall in office demand in Jul-Sep; new supply to dips 25%, reports Vestian
In Bengaluru, the absorption of office space fell 28 per cent year-on-year to 3.6 million square feet during September quarter 2023 from 5 million square feet in the year-ago period.
The Bengaluru office market was affected during July-September period as gross leasing of workspace fell 28 per cent and new supply declined 25 per cent year-on-year amid subdued demand from corporates, according to real estate consultant Vestian. Vestian on Monday released its office market report of India's top seven cities for the third quarter of this calendar year.
In Bengaluru, the absorption of office space fell 28 per cent year-on-year to 3.6 million square feet during September quarter 2023 from 5 million square feet in the year-ago period.
The new office supply in Bengaluru declined 25 per cent year-on-year to 2.7 million square feet. Vestian expects office demand in Bengaluru to rise with large IT companies deciding to call their staff back to office.
Overall, across the seven cities, Vestian data showed that gross office space leasing rose 21 per cent to 15.9 million square feet in July-September this year from 13.11 million square feet in the year-ago period.
Apart from Bengaluru, the other six major cities are Delhi-NCR, Mumbai, Chennai, Kolkata, Pune and Hyderabad. A 26 per cent increase was seen in new supply across these top seven cities to 13.4 million square feet during the quarter under review.
Commenting on the report, Shrinivas Rao, CEO, Vestian, said, “In Q3 2023, the Indian office sector witnessed heightened real estate activities as absorption reached the highest level since the pandemic and new completions increased to a five-quarter high." The office market also reported healthy vacancy levels with an appreciation in average rentals, he added. "This showcases the robust fundamentals of the sector and a healthy demand for quality office spaces in India," Rao noted.
As per the Vestian data, the gross leasing of office space in Delhi-NCR fell 14 per cent to 3 million square feet during July-September from 3.5 million square feet in the year-ago period.
New office space supply in NCR plunged 82 per cent to 0.5 million square feet. During the September quarter, the leasing transactions of office space in Chennai rose 82 per cent to 2 million square feet from 1.1 million square feet in the corresponding period of the previous year.
The new supply in Chennai was up 71 per cent to 1.2 million square feet. In Hyderabad, the leasing of office space jumped nearly 4-fold to 3.7 million square feet from 1 million square feet. New supply in Hyderabad surged 175 per cent to 5.5 million square feet.
Leasing of office space in Mumbai rose 21 per cent to 2.3 million square feet from 1.9 million square feet. New supply in Mumbai jumped 125 per cent to 0.9 million square feet.
Pune witnessed 83 per cent increase in office leasing to 1.1 million square feet from 0.6 million square feet. New supply in Pune rose 73 per cent to 1.9 million square feet.
Leasing of office space in Kolkata increased to 0.2 million square feet during July-September from 0.01 million square feet in the year-ago period. New supply in Kolkata stood at 0.7 million square feet in the third quarter of this calendar year.
On the demand-supply trend, Rao said, "The key office markets in southern cities evolved and commanded the highest share of the pan-India absorption and new completions."
"Rentals are expected to rise in these cities on the back of renewed demand as many large conglomerates are calling their employees back to office," he observed.
The IT-ITeS sector dominated leasing during the July-September period with 25 per cent share. The BFSI sector accounted for 20 per cent of the total absorption in the third quarter of 2023.
Moreover, Manufacturing & Engineering and Flexible Space sectors accounted for 17 per cent and 16 per cent share, respectively, in Q3 2023.
Catch the latest stock market updates here. For all other news related to business, politics, tech, sports, and auto, visit Zeebiz.com
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
PM Modi has invested in this post office scheme; know his total worth as per Lok Sabha elections 2024 affidavit
SRH vs GT IPL 2024 Ticket Booking Online: Where and how to buy SRH vs GT tickets online - Check IPL Match 66 ticket price, other details
Top 7 SWP Mutual Funds: Rs 50 lakh investment, Rs 70K monthly pension for 10 years, and Rs 42.30 lakh balance value; know more details
RCB vs CSK IPL 2024 Ticket Booking Online: Where and how to buy RCB vs CSK tickets online - Check IPL Match 68 ticket price, other details
Gold and Silver rate today (May 13, 2024): Precious metal under pressure; yellow metal near Rs 72,400, white metal above Rs 84,600
SIP Returns: How Rs 3,000, 5,000, and Rs 10,000 SIPs can help you build retirement corpus of Rs 1.06 cr, Rs 1.77 cr, and Rs 3.53 cr
TBO Tek IPO Listing LIVE Update: Bumper Debut! Share list at 55% premium - Buy, sell or hold? Check Anil Singhvi's view
02:44 PM IST