India Office Market Annual Update FY 22 62a4460f2c

INDIA
OFFICE MARKET
Annual Update
FY2021-22
PAN INDIA CITY
INDIA
INSIGHTS INSIGHTS OUTLOOK
Office Market Annual Update I FY2021-22
FORE
WORD
COVID-19 has emerged as the chief designer of With ample new office supply entering the market,
office spaces in the country. And with the threat of average vacancy levels across the top 7 cities
the virus now receding due to acquired immunity also increased by 1% - from 15% in FY21 to 16% in
and the vaccination drive progressing, many FY22. As expected, IT-ITeS sectors took the lead in
offices are back to business as usual. There are office leasing activity in the current financial year,
many others that are also preparing to come back comprising 40% share, followed by Manufacturing/
to normalcy, albeit in a new normal – the hybrid Industrial segments with 15% share. Interestingly,
model. Thus, with work-from-office gradually co-working segment witnessed the highest yearly
making a comeback, commercial demand has been growth with its share increasing by 8% - from 5% in
on the rise by corporates and businesses alike. the preceding financial year FY21 to nearly 13% in
FY22.
During the financial year 2021-22, a total of 34.1 Mn
sf of net office space was leased across the top All in all, FY22 has been an interesting year for
7 cities in India, thus rising by 60% as compared Indian office market.
to FY21. The three major south cities - Bengaluru,
Hyderabad and Chennai - dominated office leasing
activity in FY22, comprising nearly 54% share
(around 18.35 Mn sf). Thus, with the scare of the
pandemic now almost receding, it may soon be
business as usual for many, if not for all.
Amid rising office demand, new projects are being

planned all across. Demand for Grade A office
spaces has gone up and many builders are now
looking to cater to this demand in major cities
including Bengaluru, Pune, Gurgaon, and Mumbai
among others.
According to data, India office market witnessed

robust new office supply across the top 7 cities
in FY22, aggregating to 51.2 Mn sf. This is 27%
more than the preceding FY2021. Of this total new
supply in FY22, the three southern cities once
again dominated with 58% share (about 29.85 Mn
sf). The share of the western markets - MMR and
Pune - increased from 19% in FY21 to nearly 30%
in FY22 (about 15.45 Mn sf). Northern market NCR PRASHANT THAKUR
contributed 11% of the total office supply.
Sr. Director & Head of Research
prashant.thakur@anarock.com
2 3
PAN INDIA CITY
INDIA
KEY INDIA OFFICE

HIGHLIGHTS MARKET ACTIVITY
51.2 Mn sf 34.1 Mn sf
New Office Supply Net Office Absorption

60 18%
(27% Y-o-Y Change) (60% Y-o-Y Change)
16%
50
14%
40 12%
Office Space Vacancy (%)

Office Space (Mn sf)
10%
30
8%
20 6%
4%
10
2%
10 0%
16 76
FY18 FY19 FY20 FY21 FY22
% INR /sf/Mo New Office Completions (Mn sf) New Office Absorption (Mn sf) Vacancy (%)
Office Market Vacancy Avg. Office Rental

(1% Y-o-Y Change) (1% Y-o-Y Change) Note: The data represents Grade A office developments only.
Net absorption refers to the incremental new space take-up.
Average rental rates are for vacant spaces that provide core facility, high side air conditioning and 100% power back up
50 % share 40 % share
Large deals (>0.1 Mn sf) IT-ITeS dominates

led Office space Leasing Office Space Leasing
4 5
PAN INDIA CITY
INDIA
NEW OFFICE NET OFFICE

SUPPLY ABSORPTION
» India Office Market witnessed robust new Kolkata – with 0.1 Mn sf - contributed the least
office supply across the top 7 cities in FY22 to new office completions. Except for NCR,
7% 3%
aggregating to 51.2 Mn sf, rising by 27% against all cities experienced a rise in new supply as
2%
FY21. Of total new office supply in FY22 across compared to the preceding financial year.
15% 11% 12% 9% 3%

3%
14%
2%
the top seven cities, the southern cities – Accounting for 15% of the India’s new office
Bengaluru, Hyderabad and Chennai - remained supply in FY22, Pune witnessed the highest
8% 14% 12%
11%
the dominant markets with 59% share (about YoY growth by 269%. Improving economy
24%
23%
29.85 Mn sf). The share of the western markets and the rising demand for office spaces
27%
– MMR and Pune - increased from 19% in FY21 from the occupiers across the top cities have
6%
“
to nearly 30% in FY22 (about 15.45 Mn sf). contributed to the positive outlook .
9%
Northern market NCR contributed 11% of the
“
11% 7%
total office supply.
20%
17%
14% 15%
» Bengaluru saw the highest influx of new supply
with 14.5 Mn sf in FY22 – accounting for 29% Bengaluru sees highest new office
16%
15%
21%
supply - 14.5 Mn sf (28% share)
11%
of the total new office supply in the top 7
cities, followed by Hyderabad with 23%. MMR
and Pune stood third with a share of 15% each.
25%
34%
25%
22%
32%
FY 20
FY 22
FY 19
FY 18
FY 21
5% 0%
0%
9%
1%
14% 3%
15%
15% 7%
Bengaluru MMR NCR Chennai Hyderabad Pune Kolkata

8%
Note: The data represents Grade A office developments only.

23%
28%
12%

24%
7%
3%
» During the financial year 2021-22, a total of accounting for 23% of the overall net office
7%
7%
7%
19%
34.1 Mn sf of net office space was leased absorption, followed by 22% in Bengaluru and
17%
across the top 7 cities in India, a rise by 60% as 15% in NCR. Kolkata has the lowest share of
24%
18%
11%
compared to FY21. Three major cities in south net office absorption with 2% share. Talking of
India – Bengaluru, Hyderabad and Chennai the YoY change, NCR, MMR and Pune (124%,
7%
26%
- dominated India’s office market with the 117% and 113% respectively) are the top cities
13%
15%
8%
contribution of 54% (around 18.35 Mn sf) of that showcased significant growth in net
the total demand. The western cities – Mumbai office absorption. With only 10% YoY change,
Metropolitan Region and Pune - absorbed 29% Bengaluru’s net office absorption growth is at
36%
28%
27%
24%
28%
of the total office space (around 9.8 Mn sf) the bottom as compared to the other top cities.
“
and the northern region NCR at 15% share. The
remarkable growth in the office market of these
three southern cities when viewed against their “
FY 20
FY 22
FY 19
FY 18
FY 21
western and northern counterparts is directly

attributable to robust demand by the IT/ITeS
Hyderabad surpasses Bengaluru in
sector, affordable rentals, and the exponential
net absorption of office spaces in
growth of start-ups locally.
FY22
» In contrast to previous fiscal years, Hyderabad
Bengaluru MMR NCR Chennai Hyderabad Pune Kolkata surpassed Bengaluru to become the most
favored office market by the occupiers in FY22,
6 7
PAN INDIA CITY
INDIA
INDIA OFFICE MARKET

VACANCY LEVELS
Widened demand-supply gap influencing vacancy levels

of office spaces
» Given the significantly high completions in the current financial year, the average vacancy rate of
office spaces across the top 7 cities rose by 1% - from 15% in FY21 to 16% in FY22. This is mainly
due to the steady pipeline of office spaces entering the market, thereby widening the gap between
demand and supply. At 28.5%, NCR has the highest office space vacancy amongst the top 7 cities,
followed by Kolkata and MMR at 23.5% and 15.75% respectively. Pune is the only city where office
space vacancy rate is hovering in single digit at 8.5%.
» On a YoY basis, Pune, Bengaluru and Hyderabad saw their office space vacancy levels inch up 3.8%,
3% and 2.9% respectively as compared to the year-ago period. Kolkata and NCR are the two cities
that registered a drop by 2.5% and 0.75% in the vacancy levels in FY22 against FY21.
35%
30%
25%
20%
15%
10%
5%
0%
8 9
PAN INDIA CITY
INDIA
INDIA OFFICE MARKET

RENTAL MOVEMENT
Average office rentals witness marginal growth across the top 7 cities in India
» Average rentals for office spaces pan-India » In comparison to FY18, the average monthly
stood at INR 76/sf/Mo. During the financial rentals across the top cities continued to
year 2021-22, MMR continued to be the most rise as of FY22. Southern cities – Bengaluru,
expensive office market at INR 126/sf/Mo while Hyderabad and Chennai - witnessed rental
Bengaluru and NCR at INR 78/sf/Mo each held growth of 10-20% as compared to year
the second position. At INR 58/sf/Mo, Kolkata FY18. Cities such as MMR, Pune and Kolkata
had the lowest average office market rentals in registered growth in the average office rental
FY22. On yearly basis, micro markets of cities ranging between 2-10% as compared to FY18.
– Hyderabad (2%), Bengaluru (1%) and MMR Office rentals in NCR largely maintained status
120 (1%) witnessed marginal appreciations in the quo during the period.
average office rental values while the remaining
cities saw no change.
116.4
Office Rental Index (Base Year FY18=100)
115
113.7
111.1
110
107.9
105
102.4
102.0
100 100.0
95
10 11
PAN INDIA CITY
INDIA
SECTOR-WISE
OFFICE TRANSACTIONS SPLIT
IT-ITeS continues to drive office space demand in the country

» Technology occupiers (IT-ITeS) continue to take » On yearly basis, co-working segment saw the
the lead in office leasing activity in the current highest growth with its share increasing by 8%
financial year, comprising 40% share, followed - from 5% in the preceding financial year FY21.
by Manufacturing/Industrial segments at 15%. Manufacturing/Industrial sector registered
Co-working spaces segment accounted for 13% the second highest YoY growth (about 4%) in
in office leasing in FY22. demand for office space across top 7 cities.
Share of the IT-ITeS and E-Commerce sectors
decreased by 8% and 6% respectively as
compared to FY21.
48%
50%
46%
45%
42%
40%
40%
40%
35%
30%
25%
20%
17%
17%
15%
14%
15%
12%
13%
13%
11%
11%
11%
11%
10%
10%
10%
10%
9%
9%
10%
8%
7%
7%
7%
6%
6%
6%
5%
5%
5%
4%
3%
0%
FY2018 FY2019 FY2020 FY2021 FY2022
IT/ITES Manufacturing/Industrial Co-working Space
Miscellaneous BFSI Consultancy Business E-Commerce

Note: Miscellaneous sectors include Telecommunication, Real Estate, Health care, Education and logistics amongst others
12 13
PAN INDIA CITY
INDIA
AVERAGE SIZE OF
OFFICE LEASING TRANSACTIONS
50%
47%
57%
50%
FY2019
FY2020
FY2021
FY2022
12% 16%
13%
14%
34%
29%
41%
37%
<0.05 Mn sf 0.05-0.1 Mn sf >0.1 Mn sf
Comprising 50% office transactions share, large deals (>0.1 Mn sf)

strengthen office space leasing in Indian markets
» Large deals (measuring 0.1 Mn sf or higher) » Mid and large deals have seen its share inching
accounted for nearly 50% of the overall office up in the current financial year compared to
transaction activity across the top 7 cities in the previous year as occupiers are optimizing
financial year 2021-22 as compared to 47% in their portfolios on the back of factors such as
FY21. Mid-sized occupiers also witnessed a bringing employees back to the workspace,
marginal rise of 1% of the total office leases in increased activity for assessment of new leases
FY22 and the small-sized deals saw a dip by 4% and improving hiring scenario amongst others.
on yearly basis.
14 15
PAN INDIA CITY
INDIA
BENGALURU
18 12%
14.5 Mn sf
16 New Office Completions

10%
(29% Y-o-Y Change)
14
» Bengaluru witnessed healthy new office supply
12 8%
of 14.5 Mn sf, comprising the highest share (of
10
6%
7.6
8
22%) amongst the top 7 cities. On yearly basis,
6 4% new supply in the city increased by 29%. Net

4 Mn sf office absorption stood at 7.6 Mn sf, rising by
2%
2 10% compared to the previous financial year
0 0% Net Office Absorption
2020-21. Healthy fresh leasing activity and
FY18 FY19 FY20 FY21 FY22 (10% Y-o-Y Change)
higher pre-commitments in buildings that got
New Office Supply (Mn sf) New Office Absorption (Mn sf) Vacancy (%)
completed during the year are some major
11.25
factors that led Bengaluru to be one of the
favourable destinations for office occupiers and
KEY MICRO MARKET RENTALS % investors.
Micro-market Grade-A Avg. Micro-market Grade-A Avg. Office Market Vacancy (Avg.) » Average office rentals in the city stood at
Rent (INR/sf/Mo) Rent (INR/sf/Mo) (3% Y-o-Y Change) INR 78/sf/Mo, depicting a marginal rise
CBD 100 – 170 Old Madras Road 70 – 90
of 1% compared to FY21. Increasing space
Old Airport Road 80 – 100 Electronic City 30 – 45
reassessments have driven the average
INR 78
ORR (Eastern) 80 – 100 Hebbal – Yelahanka 50 – 75
citywide vacancy levels to 11.25% in FY22, a
KEY LEASE TRANSACTIONS

/sf/Mo significant increase from 8.25% a year ago
period. IT-ITeS segment is the main driver
Avg. Office Rental for Bengaluru’s office market, taking up 49%

Property Tenant Micro Market Transacted Area (Mn sf) (1% Y-o-Y Change) of leasing share in the current financial year,
Helios Business Park Western Digital ORR 0.68
followed by co-working space and BFSI sectors
Sattva Alexandria Tech Continental Automotive Electronic City 0.85
Park Components India
at 17% and 14% respectively.
Bagmane Solarium
Bagmane
Capital - Rome South
Legato
Amazon
Whitefield
ORR
0.52
0.60 49 %
IT-ITeS dominates
Office Space Leasing
Average rental rates are for vacant spaces that provide core facility, high side air conditioning and 100% power back up.
16 17
PAN INDIA CITY
INDIA
CHENNAI
NNAI
4.5 12%
3.55 Mn sf

10%
(22% Y-o-Y Change)
3.5
3 8% » Chennai witnessed about 3.55 Mn sf Grade-A
2.5 new office completions in FY22, the highest
6%
2.9
2
in the past five financial years. A significant
1.5 4%
1 Mn sf growth of 22% was witnessed in the new office
2% supply compared to the preceding financial
0.5
0 0% Net Office Absorption year. The city added 7% of the India’s new
FY18 FY19 FY20 FY21 FY22 (99% Y-o-Y Change) office completions stock. Of the 34.1 Mn sf
New Office Supply (Mn sf) New Office Absorption (Mn sf) Vacancy (%) net office absorption across the top 7 office
markets in India, Chennai observed nearly 2.9
KEY MICRO MARKET RENTALS 10.35 %

Mn sf in FY22 - approx. two-fold rise in the
office space demand on yearly basis. The city
accounted for approx. 9% of the office space
Micro-market Grade-A Avg. Micro-market Grade-A Avg. Office Market Vacancy (Avg.) demand in the country.
Rent (INR/sf/Mo) Rent (INR/sf/Mo) (0.57% Y-o-Y Change)
Mount Road 70 – 90 Post-toll OMR 35 – 50 » Similar to last fiscal year, average citywide
RK Salai 65 – 90 Guindy 45 – 65 office rentals continued to be at INR 60/sf/

Mo in FY22. Average vacancy levels of office
INR 60
Pre-toll OMR 50 – 80 GST Road 35 – 50
spaces in the city grew from 9.78% in FY21 to

/sf/Mo 10.35% in FY22. IT-ITeS sector leased maximum
office space, comprising 38% of city’s office
Avg. Office Rental
transactions, followed by Manufacturing/
Property Tenant Micro Market Transacted Area (Mn sf) (0% Y-o-Y Change)
Brigade WTC Caterpillar India Engineering OMR 0.40
Industrial segment and BFSI at 18% and 14%
RMZ Millenia Saipem OMR 0.25 respectively.
38
DLF Cybercity Citi Mount Poonamallee Road 0.22
Stargate Vishranthi Trimble Perungudi 0.29

%
IT-ITeS dominates
18 19
PAN INDIA CITY
INDIA
HYDERABAD
ABAD
14 18%
11.8 Mn sf
16% New Office Completions
12

(3% Y-o-Y Change)
14%
10
12%
8 10% » Approx. 11.8 Mn sf of new office spaces entered
7.85
6 8%
the Hyderabad market, second highest in
6%
4
4% Mn sf India after Bengaluru with 23% share. The city
2 recorded the highest leasing activity in the

2%
0 0% Net Office Absorption country with net office absorption of 7.85 Mn sf,
FY18 FY19 FY20 FY21 FY22 (38% Y-o-Y Change) contributing 23% to the overall office demand
New Office Supply (Mn sf) New Office Absorption (Mn sf) Vacancy (%) across the top 7 cities. A YoY growth of 3% and
38% were registered in the new office supply

»
and net office space absorption in Hyderabad
respectively.
Average citywide office rentals in FY22 stood

Micro-market Grade-A Avg. Micro-market Grade-A Avg. Office Market Vacancy (Avg.)
at INR 58/sf/Mo. It is the second lowest price
Begumpet 45 – 60 Gachibowli 42 – 60 among all top cities in the country. Office
Banjara Hills 45 – 65 Uppal 26 – 35 vacancy levels rose from 12.8% in FY21 to 15.7%
in FY22 due to robust new supply. IT-ITeS
INR 58
HITEC City 50 – 70 Kokapet 40 - 50
occupiers remained the prominent demand

/sf/Mo drivers for office space in Hyderabad with 52%
share. Co-working spaces and BFSI were the
Avg. Office Rental
next highest leased segments in the current
Mindspace Block11 AMD Madhapur 0.18
financial year with 20% and 19% respectively.
Divyashree Orion Block B Wells Fargo Gachibowli 1.00
52
KRC Commerzone Qualcomm Madhapur 0.75
KRC Mindspace 3A&3B Smartworks Madhapur 0.44

%
IT-ITeS dominates
20 21
PAN INDIA CITY
INDIA
MMR
10 18%
7.7 Mn sf
9 16% New Office Completions

8 (43% Y-o-Y Change)
14%
7
12%
6
10%
5
4.9
8%
4 » New office supply in MMR for FY2022 stood
6%
3
2 4% Mn sf at 7.7 Mn sf, clocking a 43% growth on yearly
basis. Net office absorption also remained
1 2%
0 0% Net Office Absorption healthy at 4.9 Mn sf, inching up by a significant
FY18 FY19 FY20 FY21 FY22 (117% Y-o-Y Change) 117% year-on-year. The city accounted for 15%
New Office Supply (Mn sf) New Office Absorption (Mn sf) Vacancy (%) of the overall new office completions, third
highest in the country and 14% of India’s net
KEY MICRO MARKET RENTALS 15.75 % »

office absorption.
Average office rentals in MMR stood at INR 126/

sf/Mo, depicting a mere 1% rise compared to
FY21. Average vacancy levels of office spaces
BKC 240 – 330 Goregaon – Malad 100 – 125 in MMR remained almost stable at 15.75%, a
Lower Parel 200 – 250 Thane 65 – 85 YoY rise by 0.75%. Almost 50% of the city’s
net office absorption of 4.9 Mn sf in FY22 was
INR 126
Andheri – Kurla Road 95 – 150 Navi-Mumbai 65 - 105
observed in the BFSI sector alone. IT-ITeS and

/sf/Mo Manufacturing / Industrial sectors witnessed
the next most active office transactions in
Avg. Office Rental
MMR, accounting for 13% and 6% respectively.
Nirlon Knowledge Park Phase 5 JP Morgan Goregaon East 1.20
Equinox Business Park Future Technology Skills BKC 0.19

Foundation (FTSF)
Oberoi Commerz 3
Gigaplex Tower 9
Morgan Stanley
HDFC
Malad
Thane Belapur Road

0.34
0.25 50 %
BFSI dominates
22 23
PAN INDIA CITY
INDIA
NCR
R
12 30%
5.8 Mn sf
New Office Completions
29%

10
(-18% Y-o-Y Change)
29%
8
28%
6
5.15
28% » NCR is the only city amongst the top 7 cities
4
27%
Mn sf that witnessed a substantial fall (of 18%) in new
2 27% office supply - from 7.1 Mn sf in FY21 to 5.8 Mn
0 26% Net Office Absorption sf in FY22. Meanwhile, with 5.15 Mn sf, the city
FY18 FY19 FY20 FY21 FY22 (124% Y-o-Y Change) recorded 124% increase in net office absorption
New Office Supply (Mn sf) New Office Absorption (Mn sf) Vacancy (%) in FY22 as against FY21. NCR’s contribution to
the country’s overall new office supply and net

»
office absorption for the current financial year
are 11% and 15% respectively.
In NCR, average office rentals remained stable

at INR 78/sf/Mo in FY22 like the preceding
Rent (INR/sf/Mo) Rent (INR/sf/Mo) (-0.75% Y-o-Y Change)
Barakhamba Road 170 – 400 MG Road 115 – 150 financial year. Average vacancy levels in the
Jasola 85 – 125 Golf Course Road 95 – 180 region stood at 28.5% in FY22, registering a
marginal YoY dip of 0.75%. Technology (IT-
INR 78
DLF Cybercity 110 – 120 Noida- All 55 – 90
ITeS), BFSI and consulting occupiers took the

/sf/Mo lead for office space leasing in NCR, comprising
nearly 38%, 15% and 8% transaction share,
Avg. Office Rental
respectively.
Candor Tech Space Samsung Noida Expway 0.38
Artha SEZ Netmagic TechZone IV 0.40
38
Capital Tower 2 Zomato MG Road 0.40
Candor Tech Space Encore Midland Sector-48 0.21

Credit Management %
IT-ITeS dominates
24 25
PAN INDIA CITY
INDIA
PUNE
NE
9 9%
7.75 Mn sf
8 8% New Office Completions

(269% Y-o-Y Change)
7 7%
6 6%
5 5%
4.9
4 4%
» Approximately 7.75 Mn sf of new office supply
3 3% entered the Pune market in FY22, a massive

2 2% Mn sf growth of 269% over the previous financial
1 1% year. The city accounted for nearly 15% of the
overall new office supply across the top 7 cities.
Pune registered 4.9 Mn sf net office absorption,
the highest in the past 5 years. A YoY growth of
8.5
113% was witnessed in office space transactions
in FY22 on the back of robust demand from
KEY MICRO MARKET RENTALS % occupiers and the presence of large pre-
commitment transactions.
Rent (INR/sf/Mo) Rent (INR/sf/Mo) (3.8% Y-o-Y Change) » Like the previous fiscal year, average citywide
Hadapsar 65 – 80 Viman Nagar 55 – 65
office rentals remained stable in Pune at INR
Kharadi 60 – 95 SB Road 75 – 120
68/sf/Mo. Huge addition of new office spaces
INR 68
Hinjewadi 40 – 60 Baner 60 – 75
led to the city’s vacancy levels inch up from

/sf/Mo 4.7% in FY21 to 8.5% in FY22. IT-ITeS with
a transaction share of 48% and co-working
Avg. Office Rental spaces with 33% share were the two major
Property Tenant Micro Market Transacted Area (Mn sf) (0% Y-o-Y Change) office space occupiers in Pune in FY22.
Commerzone Building-3 Amazon Yerwada 0.62
ICC Teck Park Mindtree Shivaji Nagar 0.25
48
Amar Business Zone Indiqube Baner 0.15
Raheka Woods Tablespace Technologies Kalyani Nagar 0.16

%
IT-ITeS dominates
26 27
PAN INDIA CITY
INDIA
KOLKATA
4.5 28%
0.1 Mn sf
27%

(0% Y-o-Y Change)
3.5
26%
3
25%
» Kolkata witnessed new office supply of 0.1 Mn
2.5
0.76
2
sf in FY22, contributing the lowest share of
24%
1.5 0.2% to the overall new office supply across
1
23%
Mn sf top cities. On yearly basis, the new office
22%
0.5 completions of Kolkata remained stable.
Kolkata’s office leasing activity in the current
financial year recorded 90% year-on-year rise
- from 0.4 Mn sf in FY21 to 0.7 Mn sf in FY22.
23.5
Net office absorption of Kolkata accounted for
2% of the overall net office absorption of top 7
KEY MICRO MARKET RENTALS % cities.
Micro-market Grade-A Avg. Micro-market Grade-A Avg.

Office Market Vacancy (Avg.) » Average citywide rentals of office spaces in
Rent (INR/sf/Mo) Rent (INR/sf/Mo) (-2.5% Y-o-Y Change) Kolkata remained unchanged at INR 52/sf/Mo
Park Street 110 – 135 Salt lake Sector V 40 – 50 like the previous financial year. Average office
Topsia 70 – 90 New Town & Rajarhat 34 – 45 vacancy levels stood at 23.5% in FY22, seeing
INR 52
Kasba 75 – 90 EM Bypass 50 – 90
a marginal drop of 2.5% YoY. The city’s office

/sf/Mo leasing activity for FY22 was dominated by the
IT-ITeS occupiers with a 38% transaction share,
Avg. Office Rental followed by Co-working and Manufacturing/

Property Tenant Micro Market Transacted Area (Mn sf) (0% Y-o-Y Change) Industrial occupiers with 22% and 15%
DLF IT Park 1 Primetals Tech Rajarhat 0.05
transaction shares, respectively.
Candor Tech Space Capgemini Rajarhat 0.23
38
Merlin Infinite L&T Infotech Salt Lake V 0.60
Adventz Infinity Mindtree Salt Lake V 0.60

%
IT-ITeS dominates
28 29
PAN INDIA CITY
INDIA
OUT
LOOK
After a hiatus of nearly a year due to the pandemic
in FY 2021, the Indian office market once again
picked momentum in FY 2022. As seen, net office
absorption in FY 2021-22 rebounded to 80% of the
pre-Covid FY 2019-20 when net absorption was
approx. 43 Mn sf. Demand for Grade A office space
is also scaling new heights post the pandemic.
No wonder, PE investor interest in Grade A office
assets with quality tenants remained the highest
in FY21-22. This trend is likely to continue in the
ongoing fiscal as well. Ownerships is also expected
to witness change of hands in the coming years in
commercial office space.
Amid this increased demand for Grade A office

spaces since the pandemic, many builders are
looking to cater to this demand in major cities
including Bengaluru, Pune, Gurgaon, Mumbai
among others. This demand is mostly driven by the
IT/ITeS sectors and others. For instance, Bengaluru
is seeing high demand by not just the IT/ITeS
sectors but also from several start-ups. Outer Ring
Road, Electronic City, Whitefield are favoured
locations in the city. In Hyderabad, HITECH
city and Gachibowli are top favourites while in
Gurugram, MG Road, Sohna Road and DLF IT
parks. In Chennai, it is mostly OMR while in MMR, large offices. Also, we may see few major office
the BKC area and Worli. occupiers de-centralize and bring their offices
closer to their employees’ homes in the peripheries
Going forward, the Indian commercial office sector – increasingly being favoured by homebuyers post
is likely to emerge stronger in FY 2023 on the back pandemic. The previous ‘walk-to-work’ concept
of new hirings by large IT-ITeS companies. With has given way to buyers opting for bigger and
COVID-19 receding and new variants being not as more affordable properties in greener, less polluted
severe as the previous ones, most employees are areas in peripheries.
likely to report back to offices which may infuse
fresh demand for office spaces across the country. On a positive, these new developments in
peripheries will reduce the stress on the choked
As for trends, we may witness further de- city-centres. Also, these peripheral areas are
densification of office spaces to accommodate becoming increasingly viable with ongoing
employees in the ‘new normal.’ Safety, hygiene infrastructure projects such as Metros and ring
and security measures (following all covid roads which will further boost their connectivity to
protocols) will continue to be top priority for most the city centres.
30 31
INDIA
About ANAROCK
ANAROCK is India’s leading independent real estate services company with a
presence across India and the Middle East. The Company has diversified interests
across the real estate lifecycle and deploys its proprietary technology platform to
accelerate marketing and sales. The ANAROCK services suite includes Residential Broking &
Technology, Retail (in partnership with Vindico), Commercial, Investment Banking, Hospitality
(in partnership with HVS), Land Services, Industrial and Logistics (in partnership with
Binswanger), Investment Management, Research, Strategic Advisory & Valuations and
Project Management Services (in partnership with Mace), Flexi Spaces (in partnership
with Upflex) and Society Management Services (acquisition of ApnaComplex).
ANAROCK has a team of over 1800 certified and experienced real estate professionals
who operate across all major Indian and Middle East markets. ANAROCK also manages
over 80,000 established channel partners to ensure global business coverage.
Please visit www.anarock.com Follow us on
Authors Abhai Mani Chaturvedi Sumeet Singh Negi

Vice President, Research Assistant Vice President, Research
abhai.mani@anarock.com sumeet.negi@anarock.com
Meruga Pallavi
Assistant Manager, Research
meruga.pallavi1@anarock.com
Editor Priyanka Kapoor Designer Aditya Kakodkar

Vice President, Research Sr.Associate-Corporate Marketing
priyanka.kapoor@anarock.com aditya.kakodkar@anarock.com
For bespoke research requirements, please connect with

Prashant Thakur
Sr. Director & Head of Research
prashant.thakur@anarock.com
ANAROCK Property Consultants Pvt. Ltd.

1002, 10th Floor, B Wing, ONE BKC, Plot No. C-66, G Block Bandra Kurla Complex, Mumbai 400 051
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India Office Market Annual Update FY 22 62a4460f2c

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India Office Market Annual Update FY 22 62a4460f2c

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INDIA

Amid rising office demand, new projects are being

According to data, India office market witnessed

KEY INDIA OFFICE

New Office Supply Net Office Absorption

Office Space Vacancy (%)

Office Market Vacancy Avg. Office Rental

Large deals (>0.1 Mn sf) IT-ITeS dominates

NEW OFFICE NET OFFICE

15% 11% 12% 9% 3%

Bengaluru MMR NCR Chennai Hyderabad Pune Kolkata

Note: The data represents Grade A office developments only.

Net absorption refers to the incremental new space take-up.

western and northern counterparts is directly