With 75% Y-O-Y Growth, Hyderabad’s Office Leasing Driven By Technology Corporates In Q1 2022

15 Apr, 2022 17:36 IST|Sakshi Post

Hyderabad, 15 April 2022–CBRE South Asia Pvt. Ltd., India’s leading real estate consulting firm, today announced the findings of its latest official report, "CBRE India Office Figures Q1 2022." The report observed that the office sector in India continued to witness a robust recovery in Q1 2022, as leasing activity grew by 97% Y-o-Y to touch 11.4 million sq. ft.

Total office leasing for the quarter was 1.4 million sq. ft. in Hyderabad, led by technology corporates (90%) and flexible space operators (7%).

Overall office supply in Q1 2022 was around 9.4 million sq. ft. – a slight decline of around 11% year on year and 41% quarter on quarter. Bangalore, Hyderabad, and Chennai dominated development completions, accounting for a cumulative share of about 70%. Supply was driven by non-SEZ developments, with a share of around 83%.

Anshuman Magazine, Chairman & CEO-India, South-East Asia, Middle East & Africa, CBRE said"With the government’s evolving COVID-19 protocols and the recovery in office leasing in 2021, we expect the positive momentum to further strengthen in 2022." We continue to witness a pickup in long-term decision-making by occupiers, aided by return-to-work strategies, thereby accelerating project completions. "

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, "As the economic recovery continues to gain momentum, we expect the increase in leasing activity to bring a new focus on large-sized and high-quality buildings by developers to differentiate their assets and attract occupiers. We also expect large institutional players to continue with greenfield investments via JVs, partnerships, platforms or brownfield investments via REITs, which in turn would boost the upcoming supply in the coming years.

Occupier interest in Hyderabad's office space has remained strong. Observing a strong leasing trend, we expect the momentum to continue and attract larger occupiers, thus witnessing sizable office space take-ups in 2022.

Other observations

Supply: 

  • Supply would continue to be dominated by Bangalore, Hyderabad, and Delhi-NCR, which would drive close to 70% of the completions in 2022.
  • Hyderabad and Delhi-NCR would mostly lead the SEZ supply, while non-SEZ supply would be led by Bangalore, followed by Delhi-NCR and Hyderabad.

Office space take-up:

  • The share of large-sized deals remained similar to the previous quarter at about 7%, while the share of medium-to-large-sized (more than 10,000 sq. ft.) deals witnessed a rise.
  • As of 2021, Bangalore, Hyderabad, and Delhi-NCR are expected to continue to drive transaction activity in 2022.

Key trends

  • Renewals, renegotiations, and the addition of flexibility options are likely to be the focus of occupiers in the short term.
  • We expect to see clearer evidence emerging in any corporates intended to shift towards hybrid working policies, with several occupiers planning to implement policies allowing office-based working with the option of working remotely.
  • With an increased focus on wellness, user experience, and sustainability, occupiers are expected to demand more sophisticated and tech-enhanced real estate offerings.
  • Environmental and sustainability issues, such as carbon emissions, the use of sustainable materials, energy efficiency, and wellness enhancements, are likely to become ever more important to occupiers and owners of office buildings.

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