14 October 23
Supply of 165 m sq ft likely by 2025, surpassing 142 m sq ft in past three years: CBRE
New Delhi: India’s office space market is poised for significant growth between 2023 and 2025, with property developers saying the market has remained unaffected by the global economic slowdown.
More than 165 million sq. ft of new office space is expected to be built by 2025, surpassing the 142 million sq.ft built in the previous three years, according to a report by CBRE.
Bengaluru and Hyderabad are expected to maintain their dominance in the upcoming supply of office space, accounting for nearly half of the total supply in the top seven cities. While corporations world- wide are downsizing offices, India remains an outlier with robust leasing activity registering 56.6 million sq ft of absorption in 2022. This marked a 40% increase from the previous year and the second-highest leasing activity ever, trailing only the peak in 2019 when it reached 65 mission sq.ft
A steady supply of about 120 million sq. ft. of office space is also expected over 2026-2027.
“The average annual office supply increased by a robust 17%, and the average building size increased by a significant 18% over the three-year period from 2020 to 2022. This growth is expected to further accelerate by 15-18% during the next three-year period from 2023 to 2025, supported by strengthening occupier demand and developers’ expansion plans,” said Anshuman Magazine, CEO, India, Southeast Asia, Middle East & Africa, CBRE. Experts said with sustained technology spending from corporations, India will remain ‘Office of the World’.
The country’s cost and scale advantages would drive global corporations to set up more Global Capability Centres (GCCs) across sectors. Between 2023 and 2025, Bengaluru will lead the office space supply, accounting for 29% of the total supply in India, followed by Hyderabad at 20%, Delhi-NCR at 17%, Pune at 12%, Chennai at 11%, Mumbai at 9%, and Kolkata at 2%.
Source-The Economic Times