New Delhi, 27 th April 2024: As per the latest office market report from Vestian, absorption
increased to 13.40 Mn sq ft in Q1 2024 from 11.85 Mn sq ft in Q1 2023, showcasing a 13%
increase Y-O-Y. However, the absorption declined by 31% this quarter after peaking in Q4
2023. Southern cities (Bengaluru, Chennai, and Hyderabad) accounted for 61% of the Pan-
India absorption in Q1 2024 its share increased from 54% a year earlier.
Absorption more than doubled within a year in Chennai and Mumbai, whereas it increased
by 51% in Hyderabad. All the other cities witnessed a decline over the same period a year
earlier. Moreover, IT-ITeS sector dominated absorption with 47% share, followed by the BFSI
sector with 11% share. Flexible spaces garnered interest from large conglomerates post-
pandemic, accounting for 8% of the pan-India absorption in Q1 2024.
Shrinivas Rao, FRICS, CEO, Vestian said, “2024 started on a positive note as major office
markets of India witnessed sustained absorption activities. ‘Return to Office’ mandates are
likely to renew demand for office spaces across the country and may drive the next wave of
growth amid global headwinds.”
Absorption:
City Q1 2024 Q4 2023 Q1 2023 Q1 2024 vs Q4
2023
Q1 2024 vs Q1
2023
Bengaluru 2.62 4.80 3.30 -45% -21%
Chennai 3.35 1.30 1.60 157% 109%
Hyderabad 2.27 4.30 1.50 -47% 51%
Mumbai 2.49 3.10 1.20 -20% 108%
Kolkata 0.16 0.23 0.35 -30% -54%
Pune 0.71 2.60 1.50 -73% -53%
NCR 1.81 3.00 2.40 -40% -25%
Total 13.40 19.33 11.85 -31% 13%
Source: Vestian Research
New completions followed the same trend and witnessed an annual increase of 26%,
reaching 10.8 Mn sq ft in Q1 2024. However, new completions declined by 27% over the
previous quarter. While Bengaluru dominated new completions with 3.7 Mn sq ft, Hyderabad
reported nearly 2.5 Mn sq ft of supply during Q1 2024.
New Completions:
City Q1 2024 Q4 2023 Q1 2023 Q1 2024 vs Q4
2023
Q1 2024 vs Q1
2023
Bengaluru 3.7 4.5 2.7 -18% 37%
Chennai 0.6 2.5 0.9 -76% -33%
Hyderabad 2.5 2.3 1.6 9% 56%
Mumbai 1.0 1.5 NIL -33% NA
Kolkata NIL NIL 0.4 NA NA
Pune 1.7 1.3 1.3 28% 31%
NCR 1.3 2.6 1.7 -50% -24%
Total 10.8 14.7 8.6 -27% 26%
Source: Vestian Research
Absorption surpassing new completions led to a slight improvement in occupancy levels
across the country. Currently, vacancy level stands at 13.8%, which may improve further in
the second half of 2024, owing to the growing prominence of ‘Back to Office’ mandates.
Weighted Average Rentals Value (INR/sq ft/Month):
City Q1
2024
Q4
2023
Q1
2023
Q-o-Q%
Change
Y-o-Y%
Change
Bengaluru 85 85 83 0.0% 2.4%
Chennai 60.5 59.5 58.4 1.7% 3.6%
Hyderabad 66.9 66.6 63 0.4% 6.2%
Mumbai 126.4 124.5 122 1.5% 3.6%
Kolkata 46.7 45.3 45 3.1% 3.8%
Pune 78.2 76 73 2.9% 6.8%
NCR 67.7 67 65.3 1.0% 3.7%
Source: Vestian Research
Sustained absorption activities and limited new completions in the past year guided rentals
northward. As a result, rentals appreciated across the top seven cities in the range of 2.4%
to 6.8% over the previous year. Pune witnessed the highest annual increase in rentals due to
robust demand for office spaces with a majority of transactions, around 37%, concentrated in
the manufacturing and engineering sector.
Mr. Rao further added, “domestic investors are bullish about India’s growth story and may
contribute significantly to the future growth of office spaces in India.”
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