India office market peaks to 3 yr high with 38.25 mn sq ft absorption

MUMBAI: India’s office market net absorption across the top seven cities (Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Kolkata, and Pune) for the full year was recorded at 38.25 million sq. ft, hitting a three-year high.

The net absorption for the calendar year 2022 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, showcasing the strong resilience of the Indian office markets.

On a quarter-on-quarter (Q-O-Q) basis, net absorption is down by 19.0% at 7.99 million sq. ft, as early signs of sluggishness driven by global headwinds saw delayed decision-making and a cautious approach from occupiers impacting deal closures in the last quarter of the year.

In Q4 2022, Delhi NCR led the way with a 23.7% share of net absorption, with Hyderabad and Chennai showing strong year-end momentum to power ahead of even Mumbai and Bengaluru during the quarter.

The top three cities, combined for a 60.9% share of net absorption in Q4 2022, driven by strong supply addition backed with previous pre-commitments.

“The office market in India has made a strong recovery in 2022 with the year emerging as the strongest in terms of office market performance post-COVID and second only to 2019 over the last decade,” said Rahul Arora, head office leasing advisory India-MD, Karnataka, Kerala, JLL India.