The Connect: Quarterly Report Q2 2023
Amid global macroeconomic uncertainty, India’s office markets performed commendably. Quarterly increase in absorption and new completions project strong faith of stakeholders in India’s growth story. India’s three key southern cities — Bengaluru, Chennai and Hyderabad — dominated office demand with contribution of 59% of the total office leasing across the top seven cities during Q2 2023.
As companies emphasize bringing their employees back to the office, the utilization rate for office spaces in India is likely to improve in the coming quarters. However, hybrid working will continue to be a dominant working model in the short term. As global markets stabilize, the second half of the year is expected to see increased real estate activities across the country.
Key Highlights
- A robust absorption of 13.9 Mn sq ft, depicting a quarterly growth of 17%, was observed during Q2 2023 across the top seven cities. This can be attributed to the steady economic growth along with the availability of quality office assets.
- Bengaluru topped the chart with 27% share in total absorption across India, followed by Hyderabad at 17%.
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IT-ITeS sector exhibits a commanding presence in leasing, capturing the highest market share of 26% in the current quarter.
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New completions demonstrated a significant upturn, rising from 8.60 Mn sq ft in Q1 2023 to 11.30 Mn sq ft in Q2 2023, indicating a positive sentiment across the construction sector.
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Hyderabad witnessed the completion of several large office buildings during the current quarter, registering new completions of over 4 Mn sq ft.
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While Hyderabad accounted for 36% of the overall supply, Bengaluru followed with 31% share.
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