 "Mumbai office space")
With an additional 14.94 million square feet, Hyderabad offered India's highest new office space in 2022-23, according to data released by property consultancy Anarock Group on Monday. It surpassed Bengaluru in the rankings, which topped the list in FY22. At the end of FY23, Hyderabad accounted for a 31 per cent share of the total office space supply in the top seven Indian cities.
Bengaluru offered 12.66 million square feet of new office space in the year. This made up a 26 per cent market share, 13 per cent lower than in FY22. Delhi-National Capital Region (NCR) followed Bengaluru, adding around 8.82 million square feet of new office space.
The new office space fell 46 per cent in Mumbai Metropolitan Region (MMR) to 4.18 million square feet during the year.
In terms of net office absorption, Bengaluru led the chart with 9.88 million square feet, followed by Delhi-NCR and Hyderabad with 6.89 million square feet and 6.88 million square feet, respectively.
However, Prashant Thakur, senior director and head of research at Anarock Group, said that the growth in office real estate saw a slowdown in the second half of FY23 owing to global headwinds.
"This trend is likely to continue in the near future. Major headwinds including layoffs by corporates and global recessionary trends will continue to mar office space growth in India," he said. "The currently depressed Indian office market may not improve till the first half of 2024. Many IT companies have scaled down their business and are not looking to expand."
The data showed that the average vacancy rate for Grade A office space in the top seven cities in India stayed flat and declined by 0.1 per cent year-over-year (YoY) to 15.9 per cent in FY23.
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Moreover, the rents of office spaces have also gone up. According to Anarock, the average office rental prices in India's top seven cities increased by 4 per cent in FY23. The average monthly rental price for Grade A office spaces across the country reached Rs 79/square foot,
"This upward trend is largely due to the rising cost of inputs, such as construction materials and labour," the company said.
Pune and Bengaluru saw the steepest increase in average office rental values, with a rise of 10 per cent and 9 per cent, respectively. Hyderabad came next with a jump in monthly rent by 7 per cent in FY23.
