Last year’s office leasing surpassed 2016-2018 average by 7 per cent

Overall office gross absorption across the top six cities was at about 33 million sq feet, 10% higher compared to 2020, as per Colliers. Pan-India absorption during the year surpassed the annual gross absorption during 2016-2018 by 7%, signalling a strong revival in occupier confidence.

Occupancy levels rose in prominent office micro markets across the top 3 cities at the end of 2021 from Q3 2021, led by a gradual revival in demand and fewer occupier exits. Overall office space absorption is reviving and growing better-than-expected. On a city level, all cities, except Bengaluru and Delhi-NCR have surpassed the annual average absorption of 2016-2018. Hyderabad had seen strong recovery gains in 2020 and maintained its streak in 2021 as well.

It was followed by Chennai and Mumbai which gained significant scale during the year. This is attributable to a strong Q4, building on the momentum witnessed during the previous quarter of the year. Total pan-India vacancy levels stood at 18.5%, a mere 40-basis point increase from Q3 2021. “The year 2021 has emerged to be better than expected, considering the devastating wave we saw during the year. Demand continues to be led by technology companies. 

However, we are seeing greater appetite for office space by start-ups. The year 2022 will even be better, even if the concerns of COVID-19 persist. Gross absorption in 2022 will be about 15-20% higher as occupier confidence is back in the market,” Ramesh Nair, CEO, India and MD, Market Development, Asia, Colliers.