Commercial Realty

Office market leasing in H1 2022 witnesses 65% YoY growth, returns to pre-pandemic level

[] Office markets in the seven key cities of India, recorded total leasing of approximately 27.2 million sq ft of space in H1 2022

Office markets in the seven key cities of Bangalore, Hyderabad, Chennai, Pune, Kolkata, Mumbai and the NCR recorded total leasing of approximately 27.2 million sq ft of space in H1 2022, showing 65% YoY growth. The Co-working sector accounted for nearly 20% of the transacted space. These were among the major findings mentioned in a report titled ‘Shifting Trends in Indian Office Market – Understanding the New Cogs’, by Vestian, in association with FICCI.


  • Office absorption in the first half of 2022 recorded at 27.2 million sq ft; equals the absorption witnessed during pre-pandemic period of H1 2019.
  • New office completions pegged at 26.9 million sq ft in H1 2022, depicting a 32% YoY improvement.
  • The pandemic-impacted period spanning H1 2020 to H1 2022 saw total absorption of 103.56 million sq ft and the completion of a new 98.8 million sq ft.
  • Bengaluru leads the way in both absorption and new office space completions during the pandemic years, followed by Hyderabad.
  • Evolving market dynamics, taking into consideration factors such as infrastructure push, ESG compliance, proptech adoption and strengthening co-working and start-up ecosystem, that have increased bearing on the office market.

Office market leasing in H1 2022 witnesses 65% YoY growth

Office market leasing in H1 2022 witnesses 65% YoY growth

Office market leasing in H1 2022 witnesses 65% YoY growth

Commenting on the report, Shrinivas Rao, FRICS, CEO, Vestian, said, “With the COVID-19 event impacting occupier expectations and consequently leading to a shift in market dynamics, it is imperative to understand the opportunities presented in the new environment. Newer cogs such as proptech, ESG implementation and policy changes have emerged on the real estate scene and harbour potential to take the sector to the next level of development.”

Sanjay Dutt, joint chairman of FICCI Real Estate Committee and MD and CEO, Tata Realty & Infrastructure Ltd, added: “We observe that India is leading to changing work cultures and environments. The report’s findings would be useful, not only for realtors but also for consumers, the government, research and academic institutes and the industry, in addressing the regulatory challenges and reflecting on our way forward.”


Key highlights during the pandemic timeline

Pre-pandemic: 2019
  • Landmark real estate absorption of 58.6 million sq ft across seven key office markets.
  • Approx. 36 million sq ft of new office space supply noted.
  • Co-working segment space take-up was recorded at 7 million sq ft, accounting for 12% of the total absorption.
Pandemic: 2020
  • Economy contracted by 24.4% during the April-June quarter, the worst contraction in the history of the Indian economy.
  • Absorption of office space takes a hit, declines by 35% on a YoY comparison.
  • New office completion too sees a YoY dip of 19%.
Pandemic: 2021
  • Despite apprehensions of a new variant during the last quarter, office space absorption across India’s seven major cities rose by 8% to 39.61 million sq ft.
  • New completion grew 20% to 39.25 million sq ft.
  • Institutional investment in real estate remains stable, recorded at USD 5.2 billion.
Pandemic: H1 2022
  • GDP grows to 4.1% in the Jan-Mar quarter; inflation touches double figures.
  • The office market in the seven key cities records total leasing of approximately 27.2 million sq ft of office space, showing 65% YoY growth.
  • Co-working sector accounts for nearly 20% of the transacted space.
  • Approximately USD 2.5 billion institutional investment in real estate observed.


Gearing up for the future by understanding the new cogs in office market dynamics

  • Push to infrastructure development has been one of the major catalysing factors to stimulate the market in the aftermath of the pandemic. Additionally, policy announcements such as granting infrastructure status to data centres and rebuilding of the SEZ norms would undoubtedly impact the office market.
  • In FY 2021, approximately 30 companies hired 3.6 lakh freshers, out of which India’s top five tech companies such as TCS, Infosys, Cognizant, HCL Tech, and Tech Mahindra have hired 2.3 lakh freshers. This alone would translate into the absorption of over 18.5 million sq ft of office space in India.
  • With ESG coming into the picture, the emphasis on sustainability has driven up considerable investment in green buildings and clean energy infrastructure. Compared with conventional structures, buildings with stronger environmental credentials that depict ESG compliance generate higher rents, fetch higher sale prices, increase retention rates, and also demonstrate lower rates of obsolescence.
  • India’s co-working spaces, initially occupied by start-ups and freelancers are now seeing increasing preferences by larger corporations in Tier I as well as Tier II cities. Not surprisingly, the sector accounted for nearly 20% of the transacted space during H1 2022 as against 15% in 2021.
  • With the hybrid work model increasingly being seen as a preferred mode of working post the pandemic, companies must now contemplate a futuristic vision for the workplace, determine the areas of investment and retraction, and come up with a stable strategy on how to meet the changed requirements of the workforce. Thus, as we progress through 2022, we expect to see the office market gearing up to meet these imminent occupier requirements and move in the direction of an improved work environment in the near future.

Copyright belongs to:

Debora Berti

Università degli Studi di Firenze, IT

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