Quarterly

Report
India Office | Q2 CY’23

OCTOBER 2023
 Executive Summary

The Indian office sector has powered through the 1st half of 2023 on the back of strong economic
fundamentals. Despite an unsteady geopolitical environment, office real estate demand numbers have
shown resilience in the Indian market. Office demand in Q2 CY’23, at 11.5 msf, was driven by Hyderabad
and Bengaluru, contributing 42% to this quarter’s demand. In particular, Hyderabad surpassed Bengaluru
for the 1st time ever in terms of quarterly office demand. Despite Bengaluru being the pan India market
leader in office stock, demand and vacancy, Hyderabad is already showing signs of becoming a strong
contender as large-sized leasing deals in Hyderabad gain momentum.

SUPPLY
Office supply, at 10.6 msf, was slightly lower than last 10 Q2 CY’23
quarter’s average. Developers’ sentiment remained at an
all-time high with 253 msf supply pipeline in the next 14

R S’ A V G .
94%
quarters, indicating an average supply of 18 msf in every
quarter. MMR, Delhi-NCR and Pune office market

RTE
witnessed a healthy demand-to-supply ratio, indicating

UA
scope for supply infusion in the future. Also, office

Q
0
T1
vacancy at a pan India level moved up slightly and these AS
OF L
cities have witnessed only a marginal increase in
vacancies as well.
DEMAND
Q2 CY’23

Outlook
R S ’ A V G.

We believe office demand to pick up in the 2nd half of 2023 86%

RTE

and is likely to settle at 40-45 msf for the full year CY 2023.
UA

With the current dip in market rentals, leasing activity is

Q

0
likely to accelerate as occupiers find lucrative deals. S T1
O F LA
However, strong occupancy levels are likely to push
market rentals upwards in H2 2023. Some of the major
themes dominating the office leasing segment will PASSING RENT GROWTH
continue to be : The Co-working sector, Green Leasing and Q2 CY’23
a 100% push towards Return-to-Office.

1%
23
Y’

1C
vs Q

CRE Matrix | Quarterly Report | India Office | Q2 CY’23

Pan India
Market Trends
Grade A Fundamentals Demand Supply Vacancy Passing Rent* Market Rent^

H1 CY’2023 Demand (msf) 23.2 100

91.9
90.7 90.6
H1 CY’2023 Supply (msf) 22.6

Wt. Avg. Rentals (INR / sqft / month)

90
84.4
82.8 82.2
Current Grade A Stock (msf) 740 81.5 81.4
80.2 79.2
78.7
80
83.1 84
81.2 81.9
Current Vacancy 17.3% 79.6 80.3
78 78.7
76.3 77.2
75.6
70
Under-Construction Grade A Stock
253.2
(msf) (till Q4’26)
60
Current Passing Rent * ₹ 84.0
(₹/sqft/month)

19%
Current Market Rent ^ ₹ 90.6 20 17.1% 17.1% 17.3% 18%
16.8% 16.8% 17.0% 16.9%
(₹/sqft/month) 16.4% 16.6%
17%
16 16%

17.4
14.8%

18.5
14.4%
15%

15.7
15.5

15.4
12

13.4
14.7
14%

11.5
11.9
13.1
12.1
msf.

11.6
City-wise Highlights

10.6
10.9
11.4
13%
8
10.3

10.2
11.1

12%
8.4

9.3

7.4
8.7

Bengaluru & Hyderabad 4 11%

10%

Contributed 0 9%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 CY'23

Note

42 %
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
TO Q2 CY’23 ^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

DEMAND

Demand 7%
5%
22%
36% 2%
28%
Bengaluru & Hyderabad
Contributed

Supply 19% 18%

15% 14% 11%
23%

63 % TO Q2 CY’23
SUPPLY
Hyderabad Bengaluru NCR MMR Pune Chennai

Contribution to Office Demand in Q2 CY’23

IT/ITeS BFSI Co-Working

25.1% 18.9% 8.7%

CRE Matrix | Quarterly Report | India Office | Q2 CY’23
Bengaluru
Market Trends
Grade A Fundamentals Demand Supply Vacancy Passing Rent* Market Rent^

H1 CY’23 Demand (msf) 5.7 100

94 94

H1 CY’23 Supply (msf) 6.3

Wt. Avg. Rentals (INR / sqft / month)

90
83
Current Grade A Stock (msf) 204
80 76 76 76
Current Vacancy 8.5% 74 73
73
71 70 78
76 77
70 74 75
Under-Construction Grade A Stock 73
91.4 71 72
(msf) (till Q4’26) 69 70
68
60
Current Passing Rent * ₹ 78
(₹/sqft/month)

9%
Current Market Rent ^ ₹ 94 8.0
(₹/sqft/month) 8.5%
7.8% 7.6% 8%
7.7% 8.1% 7.4%
8.0% 7.9% 7.5%

6.9%

7.4
7%
6.2%
5.0
msf.

4.9
4.0

4.6
Demand to Supply Ratio
4.5

4.5

4.5
6%

4.3
4.1
3.7

3.5
3.4
3.3
3.0

2.9
5%
2.5
2.4
2.4

2.3

2.2
2.0
1.5

0.9X
0.0 4%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 CY'23

Note
H1 CY’23 * Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

Market Rent – Passing Rent

Major Office Transactions

₹ 10Avg. Delta in
Incubex,
Brigade Triumph
105,830 sqft
₹66

Last 4 Q’s
Aditya Birla Retail,
Divyasree Technopolis (77 Town Centre) ₹54
86,943 sqft
Sector Occupancy
Booking Holdings,
46% 10% 8% 5% 25%
RMZ Ecoworld ₹104
6% 77,135 sqft

Capgemini,
Prestige Technology Park ₹58
IT/ITeS BFSI
74,750 sqft
Commercial & Professional Services Co-Working

Industrials Others

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q2 CY’23
MMR
Market Trends
Grade A Fundamentals Demand Supply Vacancy Passing Rent* Market Rent^

H1 CY’23 Demand (msf) 3.9

139.3
H1 CY’23 Supply (msf) 1.0 131.2
132.7
129.3 128.3
130 125.8 125.5

Wt. Avg. Rentals (INR / sqft / month)

Current Grade A Stock (msf) 121 122.9 123.3

116.9 117.7 125.8 126

Current Vacancy 19.6% 121 122
118.9 119.8 120.5
118.1 116.7
116.4
Under-Construction Grade A Stock 110.8
25.9
(msf) (till Q4’26)

Current Passing Rent * ₹ 126.0 90

(₹/sqft/month)

22.8% 22.5% 22.7% 25%

22.0%
Current Market Rent ^ ₹ 125.5
21.4%
20.6%
19.4% 19.6%
(₹/sqft/month) 18.9% 18.9% 18.7%
4.0 20%

4.1

3.5
15%

3.1
3.0

2.8
msf.

2.7
Demand to Supply Ratio

2.5
10%

2.2
1.9
1.8

1.8

1.8
1.5

5%
1.2

1.2

0.2
1.0

1.0

0.5

0.8
0.2

0.1

3.9X
0.0 0%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 CY'23

H1 CY’23 Note
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

Q2 CY’23 Vacancy
Major Office Transactions

0.2% VS Q1 CY’23
Morgan Stanley,
KRC Altimus
86,200 sqft
₹325

Tecnimont,
Gigaplex (Airoli W) ₹58
67,051 sqft
Sector Occupancy
IDFC,
30% 23% 10%6% 26% INS Towers ₹305
5% 64,981 sqft

Hinduja Realty Ventures,

BFSI IT/ITeS Tata Corporate Centre ₹250
46,247 sqft
Commercial & Co-Working
Professional Services
Industrials Others

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q2 CY’23
Delhi-NCR
Market Trends
Grade A Fundamentals
Demand Supply Vacancy Passing Rent* Market Rent^

H1 CY’23 Demand (msf) 4.0

100
H1 CY’23 Supply (msf) 3.9

Wt. Avg. Rentals (INR / sqft / month)

87.5 88.6
90 86.5 87.7
Current Grade A Stock (msf) 152 85.8
85.8 86.2 87
83.5 84.2 85.1
85.8 78.7
Current Vacancy 25% 80
82.4 75.9 81 81.7
81.6 73.7
77.7 77.7
Under-Construction Grade A Stock 76.4
47.2
(msf) (till Q4’26) 70

Current Passing Rent *

₹ 88.6 60
(₹/sqft/month)

6.0 30%
Current Market Rent ^ ₹ 72.7
(₹/sqft/month) 25.2%
24.8% 25.1% 24.9% 24.8% 25%
24.4% 24.5% 24.5%
4.0 25%
22.8% 22.6%

4.7
msf.

3.2
Demand to Supply Ratio

2.9
2.7

1.5

2.0 20%

2.6
2.4

2.3

2.3

2.4

2.0
2.3

2.0
2.0
1.5
1.5

0.4
1.3

0.8
0.9

0.9

2.8X
0.7
0.0 15%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 CY'23

Note
In Q2 CY’23 * Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

Q2 CY’23 Passing Rent

2.8%
Major Office Transactions

Synopsis,
DLF Tech Park
229,368 sqft
₹56
VS Q2 CY’22
MQDC,
Tapasaya One
40,348 sqft
₹120

Sector Occupancy
Irdeto Technology,
Advant Navis Business ₹60
33% 14% 14% 7% 28%
Park 30,883 sqft
6%

Nukleus Office Solutions,

IT/ITeS BFSI
Logix Cyber Park ₹38
28,717 sqft
Commercial & Co-working
Professional Services
Telecommunication Others
Services

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q2 CY’23
Hyderabad
Market Trends
Grade A Fundamentals Demand Supply Vacancy Passing Rent* Market Rent^

H1 CY’23 Demand (msf) 3.8

80
H1 CY’23 Supply (msf) 6.3
69

Wt. Avg. Rentals (INR / sqft / month)

Current Grade A Stock (msf) 116 70 66
63 64
62 63
60 59
Current Vacancy 24.6% 58 58
60 62
55 62
61 61
58 59
Under-Construction Grade A Stock 57 58
56.9 56 56
(msf) (till Q4’26) 50 55

Current Passing Rent * ₹ 63

(₹/sqft/month) 40

8.0 30%
Current Market Rent ^ ₹ 62 24.1% 24.6%
23.7%
(₹/sqft/month) 22.0% 22.5% 25%

18.8% 19.0% 19.0% 18.9%

17.9%
17.1% 20%

7.3
4.0 15%
msf.

4.2

Supply Growth

3.8
3.6

3.5
10%
3.2

3.1
3.1
2.9

2.7
2.6

2.6

2.5
2.5

5%
0.7
2.0

1.8

1.7

1.6
1.5

1.1
1.3
0.5 %
0.0 0%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 CY'23

Q1 CY’23 Note
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

Q2 CY’23 Passing Rent

Major Office Transactions

6% VS Q2 CY’22
HighRadius Technologies,
Mindspace (Hyderabad)
351,874 sqft
₹70

Electronic Arts Games India,

RMZ Nexity ₹75
319,716 sqft

Sector Occupancy
HDFC,

47% 11% 12% 7% 16%

Meenakshi Tech Park ₹48
289,881 sqft
7%

Syngene Scientific Solutions,

MN Park Synergy Square 2 (Bio Park) ₹54
IT/ITeS BFSI
202,200 sqft
Commercial & Co-working
Professional Services
Health Care Others

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q2 CY’23
Pune
Market Trends
Grade A Fundamentals Demand Supply Vacancy Passing Rent* Market Rent^

H1 CY’23 Demand (msf) 3.2

90
82.5
H1 CY’23 Supply (msf) 2.4 82.9
77.4 76.5

Wt. Avg. Rentals (INR / sqft / month)

80 74.8
73.5 75.7
Current Grade A Stock (msf) 76 69.8 70.7
68.3 68.7 76.6
70 73.1 74 75.4
67.8
71.1 72.2
Current Vacancy 15% 68.9 69.4 70.5

60 63.9

Under-Construction Grade A Stock

17.9
(msf) (till Q4’26) 50

Current Passing Rent * ₹ 76.6 40

(₹/sqft/month)

4.0 17%
Current Market Rent ^ ₹ 76.5 14.4% 14.7% 14.9%
13.4% 15%
(₹/sqft/month) 12.2% 13.0% 12.8%
3.0 13%

11%

13.1
8.1% 8.2%
2.0 9%
11.1
msf.

6.8% 6.5%
Demand to Supply Ratio 7%

0.6
1.0 5%
0.5

3%
0.8

0.8
0.9

2.0
3.2

2.7
1.0

1.0

1.8
0.1

1.9

1.6

1.6
1.3
0.5

2.1
1.2

1.2

1.1
0.2

2.6x
0.0 1%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 CY'23

Note
In Q2 CY’23 * Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the market
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

Q2 CY’23 Passing Rent

Major Office Transactions

6%
Roche Information Solutions I,
RMZ Icon (45 Icon) ₹90
192,293 sqft
VS Q2 CY’22
Springer Nature Technology
Gera Commerzone
104,000sqft
₹83

Sector Occupancy
Garfield Health Solutions East,
Embassy Tech Zone ₹53
42% 16% 11% 9% 19% 85,474 sqft
3%

WeWork,
Eleven West ₹78
IT/ITeS BFSI Co-Working 72,499 sqft

Commercial & Industrial Others

Professional Services

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q2 CY’23
Chennai
Market Trends
Grade A Fundamentals Demand Supply Vacancy Passing Rent* Market Rent^

H1 CY’23 Demand (msf) 2.5

90

H1 CY’23 Supply (msf) 2.7

80

Wt. Avg. Rentals (INR / sqft / month)

Current Grade A Stock (msf) 71 70.2
72.6
69.2 71.6
70 67.4 67.2
65.2 64.5
63.6
Current Vacancy 17.4% 61.8 60.1
67.5 68.1
64.6 65.7 65.7 66.4
60 63.8 64.9
62.1 62.7
Under-Construction Grade A Stock 60.2
14.1
(msf) (till Q4’26)
50

Current Passing Rent * ₹ 68.1

(₹/sqft/month)
40

3.0 19%
Current Market Rent ^ ₹ 72.6 16.2% 16.3%
17.4%
16.0% 15.7% 17%
(₹/sqft/month) 15.5% 15.4% 15.3% 15.6%
15.2% 14.9%
15%
2.0

13.1
13%

12.0
11.1
msf.

11%
Q2 CY’23 Supply 1.0
9%

7%
0.5

0.5

0.8
0.6

0.6

2.4
2.6

1.3

1.3
0.7

1.2
1.5

1.6
0.7
1.3

1.2
1.1
0.3

0.3
4X
0

0
0.0 5%
0

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 CY'23

Q2 CY’22 Note
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

YTD CY’23 Demand

Major Office Transactions

10% vs YTD CY’22

HDFC,
KRC Commerzone Porur
306,211 sqft ₹53

Agilysys Technologies,
Intellion Park (Ramanujan IT City)
181,818 sqft ₹90
Sector Occupancy
Tata Elxsi,
47% 15% 8% 6%6% 18% Chennai One (Phase 2) ₹57
116,230 sqft

IT/ITeS BFSI Star Health & Allied Insurance,

Acropolis
₹80
Commercial & Healthcare
Professional Services
90,884sqft
Industrial Others

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q2 CY’23
 Manoj Gaur Boman Irani Shekhar G Patel Mr. G Ram Reddy
Chairman President President-Elect Secretary

Deepak Goradia Anand Singhania Nandu Belani Sunil Furde Swaminathan Sridharan Shobhit Mohan Das
Vice President (West) Vice President (Central) Vice President (East) Vice President (Special) Vice President (South) Vice President (North)

Statistics and Research Committee

Dr. Adv. Harshul Savla Dharmendra Karia Joydeep Ponugoti

Chairman Co-Chairman Co-Chairman

PR and Media Committee

Raajesh Prajapati Deepak Kapoor Amit Raja

Chairman Co-Chairman Co- Chairman

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q2 CY’23
Research Team

Upasana Garg
Real Estate Analyst
upasana.garg@crematrix.com
Grade-A India
Warehousing Report
H1 - CY'23
Pranav Bhalla
Head – Research & Consulting September 2023

pranav@crematrix.com

Abhishek Tiwari
Co-founder
abhishek@crematrix.com

MMR Housing Report

Abhishek Kiran Gupta August 2023

CEO & Co-founder

abhishekkirangupta@crematrix.com

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July 2023

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