SURPASSES 5-YEAR PRE-PANDEMIC AVERAGE

Office Absorption Rises to 3-year High on Strong Demand Mkt sees 46% growth to 38.25m sq.ft across top 7 cities this year

Mumbai: The commercial real estate market hit drastically by the Covid-19 pandemic 

has made a strong comeback in 2022 with steady recovery in demand for office spaces

across key cities of India. The office property market has not only shown resilience 

but also overcome the pandemic-driven challenge of the work-from-home model

and emergence of hybrid work formats to register a record performance.

The demand pipeline for office real estate and pre-commitments continue to be healthy

and is expected to propel the performance further in 2023.

India’s office market net absorption across the top seven cities for the full year 

rose 46% to 38.25 million sq ft, a three-year high. The performance has surpassed the 

five-year pre-pandemic average (2015-2019) by 3.1% as well and is second only to

the 2019 net absorption numbers for the past 10 years, showed data from JLL India.

“India’s momentum as an actively growing office market with new job creation, its 

established and further-growing credentials as a tech and innovation hub, 

companies’ expansion plans remaining intact, and more firms looking at India from a

talent perspective are all strong growth drivers for the office market to have put 

in such a performance for 2022,” said Rahul Arora, head office leasing advisory India 

& MD, Karnataka & Kerala at JLL India.

A strong year with record-high completions and previous pre-commitments being honoured

by most occupiers as return to work has gained momentum across all industries pushing 

office occupancies higher, has supported the net absorption during the year.

“There have been almost 8 lakh net new hires in the IT sector that would lead to an 

increased office demand. Employees have returned to office and the job market has rationalized

post the disorder over the last 2 years. Increasing growth in services and consulting sectors 

and with their inherent apprenticeship culture, training and physical presence will continue 

to play a key role in office demand,” said Quaiser Parvez, CEO, Nucleus Office Parks, a 

Blackstone Group entity.

According to him, the number of global capability centers (GCCs) will continue to increase

with additional 400 new centres expected in the next three years. ‘The Indian tech sector’s revenue

is expected to increase by 84% from $190 billion in 2020 to around $350 billion with digtization 

services expected to increase 4 times from 2020 to 2025. All of this will lead to a strong

demand for offices, and 2023 is also expected to see nearly 50 million sqft gross leasing.

Reference by The Economic Times

Kailash.Babar @timesgroup.com