Office absorption will reach a record level in 2022: Colliers
According to Colliers, a brand-new historic high is likely to close in 2022 after two years of gradually increasing demand for commercial offices, with gross absorption likely to reach 50 m sq toes. “This is likely to represent a 52% increase in overall leasing from the previous year. After a few years, tenants were confident in their needs for their future workplaces and began snatching up office space in the largest Indian cities. According to the research, Bangalore will likely account for 33% of the total ingestion, followed by Delhi-NCR and Hyderabad. Using this opportunity should result in increased profits for Indian citizens.
“The year 2022 is likely to be a turning point for commercial office real estate. The three cornerstones of any workplace following a pandemic are cooperation, brainstorming, and the development of a dynamic lifestyle. Slow decision-making should result in a 35–38 million square foot lease activity in 2023. According to Ramesh Nair, CEO of India and Managing Director of Market Development for Asia at Colliers, Bangalore and Hyderabad are expected to see the majority of the new supply among the top six cities in 2023.
“Market fundamentals continue to be stable and necessitate continuation through 2022. Real estate investors should right now focus on long-term balancing and building more powerful portfolios that specialize in elements like ESG and zero-carbon approach. To maintain and grow in this constantly changing market, real estate would need to reevaluate some of its traditional business strategies, according to Peush Jain, managing director of office services at Colliers India.
Modernizing workplaces may be a common subject and state-of-the-art practice. Both landlords and tenants are working to update and increase the sustainability of workplaces. A total of 118 million square feet of office space, or 19% of the total office space inventory, are upgradeable among the top six cities. While demand in Bangalore, Delhi-NCR, and Chennai has already surpassed the earlier maximum observable in 2019, Mumbai, Hyderabad, and Pune are also edging closer to reaching historical levels by the end of the year. In spite of these international financial headwinds, we observe a little decline in inquiries and demand in the near future. Leases are likely to end in the second half of 2023, assuming that demand is consistent and strong during the first half of the year.
After 2019, flex operators are likely to hire 7 million square feet by the end of 2022, reaching the highest amount ever inside the nation. This marks a two-fold increase from 2021 because large demand for flexible space has been seen from medium and large corporations this year. Occupants approaching the end of their employment are considering flex spaces as a relocation option because of the flexibility it offers. According to a C-Suite Survey conducted by Colliers and Awfis, almost 77% of the occupiers have plans to include flexible workspaces in their portfolio. In 2022, the amount of new construction is projected to increase by 25% to 30% YoY, or by about forty-four million square feet. But in 2023, it’s likely that builders will move forward with warning signs. Developers are likely to coordinate fresh deliveries with the momentum of the call. This will ensure that the market’s equilibrium is not upset and that vacancy rates remain range bound, according to Vimal Nadar, Senior Director and Head of Research at Colliers India.
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