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India : Amidst robust office space absorption seen during 2022, vacancy levels
across the top 6 cities dropped by 190 basis points YoY, to 16.6%, indicating strong recovery and
stability in commercial office markets. Albeit higher than pre-pandemic levels, vacancy levels have
declined every successive quarter of 2022 as leasing momentum remained positive. Total leasing
during the year was noted at 50.3 mn sq ft, the highest in any year. Occupiers went ahead with their
expansion plans after having been in a wait-and-watch mode for two years.

While the year 2022 saw robust demand, there was some weakness in market activity in Q4 2022 as
occupiers took a cautious stance amidst global recessionary conditions. As a result, gross absorption
in Q4 2022 was about 21% lower than the average seen during Q1-Q3 2022.

“It is encouraging to see the office market stabilizing this year with vacancies dropping after a gap of
two years. Interestingly, BFSI companies have expanded rapidly this year, with Indian banks as well
as global financial institutions leasing large office spaces. Leasing by BFSI almost doubled since last
year, accounting for a 14% share in total leasing, equivalent to flex space. This resonates with the
earnings boom seen in the BFSI sector this year. Mumbai witnessed the highest BFSI leasing at 40%
share, as financial institutions made their comeback to offices”, says, Ramesh Nair, CEO, India and
Managing Director, Market Development, Asia, Colliers.

We march into 2023 with caution, occupiers need to focus on providing agility and creating a
dynamic workplace culture as they streamline their workplace strategies for coming years.
Developers need to build collaborative and efficient office spaces with a greater focus on
sustainability and technology to create stronger portfolios.

“We saw the resilience of the Indian office market against the global headwinds. Whilst the occupier
mix would evolve along with further monetization of office buildings; 2023 would be a decisive year
for office usage patterns and shall continue to be a mix with hybrid usage. As firms are adopting acautionary stance for 2023, it is the right time to start preparing for a future generation of workforce
and focusing to create progressive, flexible workspaces having a holistic outlook towards ESG.”,
added by Peush Jain, Managing Director, Office Services, Colliers India.

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