India gross office leasing volume slips 9% to 14.7msf in Q1 | Real Estate Asia
, India

India gross office leasing volume slips 9% to 14.7msf in Q1

Fresh leasing and pre-commitments together accounted for 81% of the demand.

The gross leasing volume (GLV) in India’s office property sector declined 9% q-o-q to 14.7 million square feet (msf) in Q1 2022, but Cushman and Wakefield says this is still is a healthy number when compared to the average quarterly demand that the market has witnessed since COVID. 

“Despite the third wave, the leasing activity remained unperturbed, thereby demonstrating occupier confidence and the strength of market recovery.”

Here’s more from Cushman and Wakefield:

Mumbai, Delhi NCR, and Bengaluru were once again the chief contributors (~65%) to the quarterly office demand. Fresh leasing was recorded at 8.8 msf, a 42% expansion y-o-y, largely contributed by markets such as Delhi NCR, Mumbai, and Bengaluru. Delhi-NCR stood out with fresh leasing accounting for nearly 90% of the share in overall demand. 

Fresh leasing and pre-commitments together accounted for an 81% share of the Pan India office demand during the quarter. Larger space requirements (100,000 Sf and above) accounting for more than 40% of this new demand is an encouraging sign. 

Rentals have broadly remained stable across cities but could witness a gradual upward movement in select few submarkets in the coming quarters given relatively tighter vacancies and strong demand. Developers have good visibility around the demand pipeline through RFPs, and active requirements, therefore, are confident of launching new projects flanked by office expansions as well as concrete return-to-work strategies occupiers are adopting.

Term Renewals

Term renewals stood at 2.8 msf, growing by 5% q-o-q although it was lower by about 36% on an annual basis. They accounted for a 19% share of the overall leasing volume during the quarter. Mumbai accounted for more than 50% of the term renewals followed by Bengaluru and Hyderabad together contributing 40% of the share. 

Occupiers are in active discussions with developers seeking favourable terms given the tenant favourable market conditions. Tenants have a window of opportunity in the short term and as return-to-work gains pace and fresh demand picks up momentum. Going forward, the flexibility to lock in quality space at reasonable rents could narrow down. 

Pre-leasing Activity

At 3.18 msf, pan India pre-leasing in Q1 2022 was 77% higher than the corresponding period last year and a 125% expansion over the previous quarter. Bengaluru, Chennai, and Pune collectively accounted for around two-thirds of pre-leasing in the quarter. This indicates that major occupiers are reviving medium to long-term expansion plans in line with return-to-work strategies and to complement headcount additions from the recent past as well as account for future hiring plans. Occupiers are scouting for quality space options with lower rents and those that could accommodate short to medium-term expansion plans. We expect this momentum to gain pace over the next few quarters.

Net Absorption

The 95% y-o-y jump in net absorption in Q1 2022 was largely due to higher fresh leasing across cities/industries and faster completion of projects with existing precommitments. Bengaluru was the largest contributor followed by Pune and Delhi NCR. These three cities together have accounted for more than 2/3rd of the net absorption recorded during the quarter. 

Relocations and consolidations, a trend that has been consistent since COVID, has continued, thus impacting the net space take-up by a smaller extent this quarter. We expect this to continue in the short-term on the back of portfolio rebalancing and flight to quality. However, pan India net absorption levels will continue to improve in line with a broad-based pickup in demand across cities.


Follow the links for more news on

Join Real Estate Asia community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!