Between the years 2021 and Q1 2024, 164.3 million sq ft of new buildings were added to India's Grade A office stock, according to JLL. During the same period, JLL noted that the top seven markets in India which include Bengaluru, Chennai, Delhi NCR, Hyderabad, Mumbai, Pune and Kolkata, witnessed a cumulative net absorption of ~113 million sq. ft out of which a massive 94.3 million sq. ft were in new-age buildings (buildings completed since 2021). The improved asset quality and sustainability ratings have been positively impacting space take-up across India’s office markets.
The South Indian cities, Bengaluru, Hyderabad, Chennai, as well as Pune are the tech and GCC hubs of the country, accounting for ~84% of all GCC leasing activity since 2021. The preference for modern assets is even more pronounced here as we have witnessed vacating of close to ~4.5 million sq. ft of space in buildings completed prior to 2016, considered as old assets.
On the other hand, there has been a total net absorption of ~70 million sq. ft in projects completed since 2021, clearly outlining how more modern assets are being preferred by global occupiers as a part of their real estate strategy. This is evident given that such assets provide the right mix of amenities and drivers to create a holistic workplace environment for employees as firms look to ramp up office occupancies.
The preference becomes even more evident given that green-rated buildings with completion dates of 2017-2020 also accounted for a 70% share of net absorption seen in buildings within this age group.
