New Delhi, Apr 24 (Agency) Office space absorption across India’s six major cities – Bengaluru, Chennai, Delhi-NCr, Hyderabad, Mumbai and Pune – stood at 14 mn sq.ft., registering 16 per cent Q-O-Q growth in the first quarter of 2023. However, the YOY gross absorption declined 11 percent due to global economic pressures, according to the latest report by International real estate advisory firm, Savills India. The office space witnessed a 23 percent Q-O-Q increase in new supply infusion which stood at 13.1 mn sq.ft. in Q1 2023, the report stated. Meanwhile, flexible workspaces were the leading absorption driver for office spaces and accounted for 27 per cent of gross absorption for Q1 2023. Bengaluru, Delhi-NCR and Chennai together accounted for two-thirds of quarterly demand while the maximum supply infusion was witnessed in Hyderabad and Pune, with a cumulative share of over 50 per cent, it said.
Chennai continued to remain in the top-3 city list with respect to demand, with three-fourth of the city’s office demand coming from the micromarkets of PTR, MPR and Post Toll OMR. Hyderabad witnessed leasing activity of around 1.8 mn sq. ft., corresponding to a strong YOY increase of 50 per cent with stable rentals across micro markets while in Mumbai ,demand was driven by small and mid-sized deals with the BFSI sector continuing to drive office space take-up in the city. In Pune, flexible workspaces continued to thrive in Q1 2023, with a 41 percent share in demand. While quarterly absorption has improved in Q1 2023, there is evidence of global headwinds and related pressures, as seen in 11 percent annual decline in gross space absorption compared to corresponding quarter in the previous year. The demand is expected to pick up in due course, but Q1 performance implies that estimates for full-year 2023 remain biased on the side of caution.” said Naveen Nandwani, Managing Director -Commercial Advisory and Transactions, Savills India.