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PropEquity, India’s leading real estate data, research and analytics firm, indicates a significant 7% increase in ready supply during the third quarter of 2023 when compared to the preceding quarter, Q2 CY’23. The upswing in ready supply showcases the adaptability of the sector to the evolving needs of businesses and offering a promising outlook for those looking to secure commercial properties in the ever-changing landscape of the market.
During the same period, there was a remarkable 20% surge in net occupancy, representing a significant increase from 10.30 million square feet (in Msft) in the previous quarter, Q2 CY’23, to 12.31 million square feet (in Msft) in Q3 CY’23. On the other hand, gross occupancy slightly increased by 2% during the third quarter of 2023 when compared to the preceding quarter, Q2 2023.
This substantial growth in occupancy is a testament to the dynamic nature of the market and the heightened demand for commercial real estate during that period. It suggests that businesses and enterprises have been actively expanding their presence and operations, underscoring the vibrancy of the sector and its potential for continued development in the near future.
"India’s commercial real estate has bucked the downtrend which is witnessed in top global cities. The reason why India has not got affected is due to the increase in demand of global captive centers (GCCs) in India, which is because of several factors such as availability of good quality workforce at lower costs, lower real estate costs and favorable exchange rates among other factors.” stated Samir Jasuja, Founder & CEO of PropEquity.
The vacancy rates in the top Tier-1 cities of India have remained relatively stable. The latest figures indicate a marginal 2% increase vacancy levels compared to Q2 2023. The total vacant stock in Q3 2023 amounts to 152.32 Mnsft across these cities, out of which the largest share was of Hyderabad and Bengaluru about 43%, followed by MMR with 15%.
This trend is emblematic of the persistent evolution within India's real estate market, as it remains influenced by a multitude of factors, including the delicate balance between supply and demand, the evolving requirements of businesses, and the prevailing economic circumstances, all of which collectively sculpt the commercial property arena. Although the marginal increase in vacancy offers a promising outlook, it is imperative for key players in the industry to maintain a watchful eye and a flexible approach, ensuring they can adeptly maneuver through the continually shifting landscape of the commercial real estate sector.
