Office absorption crossed 2016-18 levels by 7%: Colliers India

Overall office absorption across top cities was at about 33 million square feet, which is 10 per cent higher when compared to 2020, as per professional services and investment management company Colliers. Pan-India absorption during the year surpassed annual gross absorption during 2016-18 by 7 per cent. These numbers, according to Colliers, symbolise a strong revival in occupier confidence.
 
It further explains that occupancy levels went up in prominent office micro markets across top 3 cities from Q3 2021 triggered by gradual revival in demand and fewer occupier exits. All cities except Bengaluru and Delhi-NCR crossed the average absorption of 2016-18. Hyderabad saw a strong revival in 2020 and maintained this in 2021 as well.
 
Submarkets like NCR’s MG Road, Bengaluru’s SBD and Whitefield and Mumbai BKC saw higher occupancy after a gap of six quarters. Following closely are Chennai, Mumbai and Pune which reported significant gains in the same year on the back of a stronger Q4. 2021 saw 35 million square feet of supply which was almost same as 2020 due to developers adopting a wait-and-watch approach.

“Office occupancy is likely to rise in prominent office districts with quality grade A stock. Occupiers have already started preferring next-generation offices. In tune with this, we expect supply in 2022 to be around 35-38 million square feet, 4 per cent higher than 2021 levels,” Senior Director and Head of Research at Colliers India Vimal Nadar said.
 
Colliers India CEO and Asia Market Development Managing Director Ramesh Nair stated that 2022 will be better than 2021 even if the concerns of COVID-19 persist as gross absorption in 2022 will be about 15-20 per cent higher.
 
Meanwhile, the Colliers report also states that leasing by start-ups went up by at least 56 per cent from 2020 and the most preferred location for these start-ups has been Gurugram. It further showed that there has been a 50 per cent rise in leasing activity in Delhi-NCR on year-on-year basis and Gurugram accounted for almost 64 per cent share in leasing activity as many firms relocated to upcoming micro markets like Golf Course Extension Road, Cyber City and MG Road.

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