India Commercial Real Estate Trends 2022 - 2023

India Commercial Real Estate Trends 2022 - 2023

According to a research by Colliers, Gross Absorption For Office Space in India is Anticipated To Reach 50 Million Square Feet In 2022 And Decline To 35 To 38 Million Square Feet.

Also Bengaluru will continue to be the market leader, accounting for 33 percent of office leasing in 2022.

Gross absorption for commercial office space is projected to reach 50 million square feet in 2022, following two years of sluggish demand, according to a report by Colliers. However, gross absorption is expected to moderate in 2023, with gross absorption closing at 35 to 38 million square feet in response to global signals.

In 2022, Bengaluru is projected to contribute for around 33 percent of the gross absorption, followed by Delhi-NCR with 18 percent and Hyderabad with 15 percent.

Slow decision-making might result in lease activity of 35-38 million square feet in 2023, although Bengaluru and Hyderabad are projected to receive the majority of new supply among the top six cities, according to the report.

"In 2023, sluggish decision-making might result in lease activity of between 35 and 38 million square feet. Bengaluru and Hyderabad are anticipated to receive the greatest new supply among the top six cities "

according to Ramesh Nair, CEO, India, and Managing Director, Market Development, Asia for Colliers.

Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune are the top six cities.

The international expert also emphasised that workplace upgrades would be a reoccurring topic. Landlords and tenants will want to renovate office space. In the top six cities, about 118 million square feet of office space, or 19 percent of the total office space, has the potential to be upgraded.

According to the report, there might be a minor decrease in inquiries and demand in the near future due to global economic challenges. If demand is continuous and stable in the first half of 2023, rental rates are anticipated to increase in the second half of the year.

After 2019, flex operators will likely lease 7 million square feet by the end of 2022, a record for the nation.

This is a twofold increase from 2021, as demand for flex space from medium and big businesses has skyrocketed this year.

Tenants whose leases are about to expire are investigating flex spaces because they provide more flexibility. According to a C-Suite Survey done by Colliers and Awfis, around 77% of occupiers want to include flexible workplaces in their portfolios.

"In 2022, new supply is anticipated to expand by 25 to 30 percent on a year-over-year basis, reaching about 44 million square feet. However, developers will likely proceed with caution in 2023. It is expected that developers will link fresh supply with the demand trend. This would guarantee that the market's balance is not upset and vacancy rates stay within a certain range "

said Colliers India's Senior Director and Head of Research, Vimal Nadar.