The city has seen a substantial increase in office space absorption. A Glance of Srinivasa Rao
The city has seen a substantial increase in office space absorption. A Glance of Srinivasa Rao
Bengaluru has earned the distinction of being the most prominent office destination in the country. The fact that it is one of the fastest growing metropolitan areas in the country, along with the added benefits of a healthy climate, a vibrant metropolitan population and a growing knowledge economy, gives the city an edge over other major Indian cities. .
Half-Year (H1 2022) Overview
Bengaluru saw office absorption of 7.7 million sq ft in the first half of the year, surpassing the volume seen in H1 2021 by 67%.
Work area in a modern office
The ORR office market, which is most favored by the IT/ITES sector, continued to lead the demand for occupants, accounting for 42% share in H1 2022.
An interesting trend observed was in respect of managed offices/co-working segment operators. While the clause had gone through a lot of apprehensions during the initial pandemic period, with most tenants requesting for rent waiver or renegotiation on their tenure agreements, it picked up pace with the opening of offices in H2 2021 and its share in absorption estimated at 24%. H1 in 2022.
Second Quarter (Q2 2022) Overview
The total office space absorption in Bengaluru was recorded at 4.2 million sq ft in Q2 2022, showing an annual growth of 133%. Compared to the previous quarter, an increase in absorption was registered at 20%.
Modern gadgets in co-working office interior
This substantial YoY increase in absorption growth in Q2 2022 can be largely attributed to the severity of the second wave of the pandemic during Q2 2021, which also impacted real estate activities, leading to a significant demand in the city office market. decreased.
Meanwhile, the new completions continued their forward momentum, and were recorded at 2.9 million square feet in the second quarter of 2022, up from a total of 5.9 million square feet in the first six months of the year.
On the weighted average rental front, Bengaluru saw an increase in rental values in Q2 2022 with a 5% increase in values in Q2 2021.
Given the market traction seen in H1 2022, the Bengaluru office market has a good potential to regain its momentum, which was seen in the pre-pandemic era, and till the pandemic continues to make its presence felt. Holds, the strong fundamentals that govern the market will prove to be quite resilient.