Bengaluru led office space deals with a total of 3.5 million sq ft of leasing, while the country’s overall office transactions went up by 5 per cent y-o-y to 11.3 million sq ft in Q1 2023, according to a report.
NCR recorded 2.6 msf and Mumbai recorded 2.2 msf of gross leasing in the first three months of 2023. In its recent report, Knight Frank India found that the three largest markets accounted for 73 per cent of transactions and grew in y-o-y terms.
Bengaluru was the most active market during Q1 2023 and accounted for 31 per cent of the total area transacted during the period. Information technology-dominant markets like Chennai, Hyderabad, and Pune saw occupier activity decline during the quarter.
Moreover, new completions in this quarter were recorded at 4.6 msf. NCR saw a fresh supply of 2 msf, and Bengaluru saw 1.3 msf of new office space.
Rents have grown across eight key cities during the quarter. Rental values increased 9 per cent in Kolkata, and by 5 per cent in Hyderabad, Bengaluru, and Chennai.
“The premise for value-add offerings and flexibility has firmly entered the mainstream and swayed occupiers in their favour. The strong fundamentals of the Indian office market and gradually improving physical occupancy levels observed across the eight markets, are an encouraging sign for the year ahead,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
Flex spaces constituted 29 per cent of the transacted space. Bengaluru accounted for a substantial 50 per cent of the total space transacted by the sector. The other service sector companies took up 30 per cent of the space transacted during the period, while the IT and BFSI sectors accounted for 16 per cent each.