Fresh supply of office space rises 96% in Jan-Jun across 6 cities

New supply of office space nearly doubled in January-June to 23.7 million square feet across six cities on lower base effect and rise in demand, according to Colliers.

The supply stood at 12.1 million square feet in the January-June 2021 across these six cities – Bengaluru, Chennai, Hyderabad, Pune, Mumbai and Delhi-NCR.

As per the data, in Chennai, the new supply jumped to 4.2 million square feet in January-June 2022 from 0.4 million square feet in January-June 2021.

New supply in Delhi-NCR rose to 2.4 million square feet from 1.5 million square feet.

Hyderabad witnessed more than three-fold jump in office supply to 6.4 million square feet in the first half of 2022 from 1.9 million square feet in the year-ago period.

In Mumbai, the new supply grew to 1.1 million square feet from 0.8 million square feet. Pune saw a multi-fold jump in the new supply to 3.8 million square feet in January-June 2022 from 0.4 million square feet in the year-ago period.

The new supply in Bengaluru fell to 5.7 million square feet in January-June 2022 from 7.3 million square feet in the year-ago period.

On demand side, during January-June 2022, the gross leasing of office space jumped more than 2.5 times to 27.5 million square feet across six cities, from 10.3 million square feet in the corresponding period of the previous year.

On the market, Ramesh Nair, CEO, Colliers India, said the corporate occupiers shrugged off major uncertainties they had over the last two years and are now going ahead with major expansion plans.

“At the same time, developers are grappling with the after-effects of soaring inflation resulting in higher cost of construction amidst global supply chain disruptions in the timely procurement of materials,” he said.

The combined effect of surging demand and limited new supply has led to a dip in vacancy for the first time after 10 quarters, Nair said.

The average vacancy of office space stood at 17 per cent at the end of June quarter from 18 per cent in the previous quarter.

“We could see a situation wherein 10-15 per cent of the planned projects may be pushed ahead as developers are exploring innovative ways to tide through these challenges,” Nair said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor