Delhi-NCR and Bengaluru are India’s largest office markets in 2022: JLL report


  • The absorption of the Indian office market in 2022 is higher than the five-year average before the pandemic (2015-2019).
  • Delhi-NCR led the list of office absorption rates with 23.7% in the last quarter of 2022.
  • Hyderabad and Chennai show strong year-end momentum ahead of Mumbai and Bengaluru in Q4 net absorption.

As offices almost reopening after two years of the pandemic, net take-up of office properties in the seven largest cities (Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Kolkata and Pune) has surpassed pre-pandemic levels, a report from real estate company JLL revealed.

Interestingly, net take-up of office real estate this year has also surpassed the five-year pre-pandemic average (2015-2019) by 3.1%. At 38.25 million square feet, net take-up this year ranks second to 2019 net take-up figures over the past 10 years, demonstrating the strong resilience of India’s office markets, according to JLL.

“The office market in India has experienced a strong recovery in 2022, with the year emerging as the strongest year in terms of office market performance after Covid and second only to 2019 in the past decade. Even with the evolving hybrid work ecosystem, we have seen a sharp rise in office occupancy rates,” said Rahul Arora, head office rental consultant India and MD, Karnataka, Kerala at JLL India said.

On a quarterly basis, however, the net absorption rate fell 19% to 7.99 million square feet. This was primarily due to delayed decision-making and a cautious approach by occupiers that impacted closing deals in the last quarter of 2018. the year, the report says.

“We are likely to see some slowdown in decision making as companies look to macroeconomic signals before committing capital for new offices. Driven by segments such as flex, healthcare-life sciences, GCCs and manufacturing/industrial along with its leading position in the global tech ecosystem, office demand is expected to be similar to 2022 with marginal to mild upside potential,” said Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.

Delhi-NCR led the list of office absorption rates with 23.7% in the last quarter of 2022. This was followed by Hyderabad and Chennai, ahead of Mumbai and Bengaluru. As a result, pan-Indian net absorption was 46.1% higher year-over-year, Arora added.

“Over the next 12 months, approximately 53-58 million square feet are lined up with an average pre-commitment level of 14-17%. For assets owned by institutional lessors that make up 30% of the supply pipeline, pre-commitment rates were 22-25%, indicating the flight to quality with healthy workspaces and ESG considerations given significant weight in space planning ,” said Das.

Gross leasing at the highest level in three years

Gross leasing hit a three-year high — up 47.4% year-over-year, JLL informed. Gross rental activity for 2022 was 49.41 million square feet as declining Covid cases and greater clarity in the business environment supported real estate activity on the ground, the report said.

Delhi-NCR and Bengaluru were the two largest office markets in India in gross rental activity this year, followed by Mumbai. These three markets accounted for more than two-thirds of total occupancy activity for the 2022 calendar year.

Not only gross rentals, even new deliveries reached a new all-time high for the Indian office markets with 58.27 million square feet in 2022. Deliveries in Q4 2022 were topped by Hyderabad and Bengaluru, which together accounted for a share of 60 .5% in quarterly delivery additions.

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