* The report consists of market trends observed in the seven major cities of the country, encompassing Bangalore, Hyderabad, Chennai, Pune, Kolkata, Mumbai, and NCR
* Office absorption in the first half of 2022 recorded at 27.2 million sqft; equals the absorption witnessed during pre-pandemic period of H1 2019
* New office completions pegged at 26.9 million sqft 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 sqft and the completion of a new 98.8 million sqft
* 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
Vestian, in association with FICCI, released a report today titled ‘Shifting Trends in the Indian Office Market: Understanding the New Cogs’. The report walks us through the office market trends during the COVID-19 outbreak and sheds light on the key insights that were perceptible in this period.
Mr Sanjay Dutt, Joint Chairman of FICCI Real Estate Committee and MD & CEO, Tata Realty & Infrastructure Ltd., said, “FICCI and Vestian have co-created this report on emerging trends that are being adopted in office spaces by companies across the country. We observe that India is leading to changing work cultures and environments. I am confident that the report’s findings would be useful not only for realtors but also for consumers, the government, research & academic institutes, and the industry. These ideas and deliberations would help us all go a long way in addressing the regulatory challenges and reflect on our way forward.”
Dr Shrinivas Rao, FRICS, CEO, Vestian, said, “This report aims to provide an insight into the various facets that emerged during the pandemic, most of which are still evolving constantly in tandem with the change in scenario. 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.”
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 lakhs freshers, out of which India’s top 5 tech companies such as TCS, Infosys, Cognizant, HCL Tech, and Tech Mahindra have hired 2.3 lakhs freshers. This alone would translate into the absorption of over 18.5 million sqft 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.