Hyderabad surpasses Bengaluru in office net absorption in Q4 2021
Hyderabad: Hyderabad surpassed Bengaluru with nearly 3 million sq ft of net absorption recorded during the fourth quarter of 2021, pushing Bengaluru to second place, which followed closely with 2.4 million sq ft. Hyderabad emerged the top market in terms of absorption among top seven cities of India. During Q4 2021, Hyderabad recorded higher absorption […]
Updated On - 4 January 2022, 09:46 PM
Hyderabad: Hyderabad surpassed Bengaluru with nearly 3 million sq ft of net absorption recorded during the fourth quarter of 2021, pushing Bengaluru to second place, which followed closely with 2.4 million sq ft. Hyderabad emerged the top market in terms of absorption among top seven cities of India.
During Q4 2021, Hyderabad recorded higher absorption than cities such as Chennai (0.85 mn sq ft), Delhi NCR (1.61 mn sq ft), Kolkata (0.47 mn sq ft), Mumbai (1.88 mn sq ft) and Pune (1.34 mn sq ft).
JLL research shows, Hyderabad saw its Q4 2021 net absorption increase 145 per cent to 2.99 million sq ft from 1.22 million sq ft in Q4 2020, while Bengaluru witnessed its absorption rise 95 per cent to 2.42 million sq ft in Q4 2021 from 1.24 million sq ft in Q4 2020. Hyderabad saw the overall net absorption in 2021 at 4.14 million sq ft.
“The tech sector continues to make big-ticket investments and remains the critical sector in spurring growth in demand of office space in Hyderabad,” Sandip Patnaik, Managing Director, Telangana and Andhra Pradesh, JLL told Telangana Today.
“The State government’s focus on improving infrastructure and availability of large talent pool makes it a lucrative market for investments,” Patnaik added.
Hyderabad also dominated in terms of completions in Q4 2021 with 2.53 million sq ft compared to 2.45 million sq ft completions in Bengaluru, 0.09 million sq ft in Chennai, 0.35 million sq ft in Delhi NCR, 0.10 million sq ft in Kolkata, 1.68 million sq ft in Mumbai and 1.93 million sq ft in Pune.
Hyderabad’s cumulative new completions in 2021 stood at 9.31 million sq ft, accounting for 20 per cent of the country’s new completions.
Pan-India scenario
The Indian office sector ended the year 2021 with net absorption for Q4, 2021 (October-December 2021) at 11.56 million sq. ft, the highest in the last eight quarters, and up by 86 per cent quarter-on-quarter. On a half-yearly basis (six months), net absorption was up by 26 per cent for the H2 periods (July-Dec 2021) on a year-on-year (Y-o-Y) basis.
New supply of 9.12 million sq ft was completed in Q4 2021, down by 16 per cent Q-o-Q. For the year 2021, the new supply addition was recorded at 45.7 million sq ft and was higher by 23 per cent y-o-y.
“While net absorption was up marginally, we have observed greater traction in overall leasing activity. The Gross Leasing Volume (GLV) for the last quarter of 2021 was recorded at the pre-Covid levels as seen in Q4 2019 at 15 million sq ft. This is also the highest in the last eight quarters and higher than the average quarterly GLV numbers during the pre-Covid (2018 and 2019) period as well,” said Radha Dhir, CEO and country head, India, JLL.
Overall office rentals remained largely stable across most major office markets in India in Q4 2021. Vacancy dropped from 15.9 per cent in Q3 2021 to 15.3 per cent in Q4 2021 backed by good leasing activity. For the first time since the pandemic broke, demand has surpassed new supply and hence vacancy has dropped by 60 bps Q-o-Q.
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