India’s journey towards attaining a $5 trillion economy has paved the way for a plethora of opportunities for the growth of commercial office markets in the country. The top-tier cities of Delhi-NCR, Mumbai, Bengaluru, Kolkata, Chennai, Pune, Hyderabad, and Ahmedabad have especially witnessed this boom. Experts predict that around 60 million sq.ft of office space may be leased in the coming years. On the other hand, 18.2 million sq.ft office spaces were leased in the Q2 of 2022. In this blog, Pyramid Lifestyles simplifies this growth and the factors responsible for the same for our audience.
18.2 million sq. ft. office spaces leased:
A recent report states that office space leasing in India recorded the highest-ever quarterly growth of 18.2 million sq.ft in the second quarter of 2022. This aggregate leasing data includes the confirmed pre-commitments and term renewals. Bengaluru, Chennai, Mumbai and Delhi-NCR, the top 4 cities, had a cumulative share of 87% in this rise.
A fast-growing economy, significant expansion in sectors such as IT, engineering and manufacturing and the banking & financial sector, a robust start-up system and the establishment of new Global Capability Centres (GCCs) are the key triggers driving this growth.
The driving forces of growth:
Technology companies’ singlehandedly led to the rise in aggregate market leasing activity with a share of 35% of the total demand. They were followed by engineering & manufacturing companies (16%), flexible space operators (12%), banking & financial services (BFSI) firms (12%), and e-commerce (7%) players.
The report further highlights that small and medium-sized office spaces were the key-takers by organizations. With low COVID-19 infections and a high vaccination rate, no restrictions on movement have allowed the opening of economic activities to their complete capacity.
Experts say that the office sector in India reflected a strong recovery in the first fiscal half of 2022 as occupier sentiments were uplifted due to the relatively reduced severity of the Omicron wave. The evident rise in leasing activity is a strong indicator that employees are resuming office with a flexible approach. Occupiers and developers are now approaching real estate planning with more certainty.
A resilient market force:
This improvement in total market demand traction is also a marker of the resilience of office markets. It also highlights the fact that physical workplaces continue to remain central to firms’ real estate plans. Organizations today are also aware of sustainable ESG practices, and spaces in compliance with these norms have witnessed a considerable rise in investments.
India’s co-working spaces, initially in demand by start-ups and freelancers, are now seeing increasing preferences by larger corporations in Tier-I and Tier-II cities. Employers are now looking to space out their workforces with smaller teams that are digitally and efficiently connected.
IT companies, outsourcing and BFSI sectors are the major occupiers of office spaces today. In the coming years, India is likely to benefit from greater offshoring/outsourcing and digital spending by international organizations, given its might as a major global IT destination.
There is a high demand for Grade ‘A’ commercial spaces all over the country. At Pyramid Lifestyle, our evolved office spaces at Pyramid Axis cater to every need and demand of organizations. These Grade-A spaces are designed for your business to evolve and progress to its fullest potential. To know more about us, visit https://www.pyramidlifestyle.com/