2023 Office Space Demand Decline Forecast in Major Indian Cities | CREDAI & CRE-Matrix Report

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    The need for office space in six big cities might go down by 18-22% this year due to delays in companies’ plans to grow. A report by CREDAI and CRE-Matrix says that in 2023, new renting of high-quality offices was around 55-57 million square feet. This excludes renewals.

    Last year, in 2022, the renting of office space was 70 million square feet. From January to September this year, renting already reached 41.8 million square feet in six main cities: Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru, Pune, Chennai, and Hyderabad. IT/ITeS, BFSI, and co-working sectors made up two-thirds of this demand across India.

    The report shows that there are about 770 million square feet of Grade A office spaces by the end of September this year. Around 17.4% of these spaces are vacant.

    CREDAI National President Boman Irani said, “As different industries in India grow and more global centers come up, we’re seeing innovation in infrastructure and design for modern Indian workspaces, which supports their growth.”

    CEO & Co-founder of CRE Matrix, Abhishek Kiran Gupta, thinks that the rising demand for offices is just the start of long-term growth in India aiming for a USD 5 trillion economy by 2030. He predicts two things: managed spaces might grow a lot as companies want convenient and employee-friendly spaces. Also, cities like Pune, Noida, Navi Mumbai, and Thane will become strong challengers to Mumbai, Bengaluru, and Gurugram for offices. These cities offer lower costs for talent, better infrastructure, connectivity, and affordable housing, attracting more office demand.

    The highest demand for office space was in Bengaluru with 10.5 million square feet from January to September, followed by Delhi-NCR with 8.6 million square feet, Hyderabad with 6.8 million square feet, MMR with 6.7 million square feet, Pune with 5.1 million square feet, and Chennai with 4.1 million square feet.

    IT/ITeS took up 35% of office spaces, BFSI 17%, and co-working 14%. The need for flexible workspaces has grown a lot after the COVID pandemic.

    Amal Mishra, CEO of Bengaluru-based Urban Vault, said, “Companies looking to expand prefer flexible workspaces now. Even those used to traditional offices are choosing co-working spaces over renewing lease agreements.

    (Source: Business standard)

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