Office space absorption touches three-year peak

CHENNAI: The net absorption for India’s office space between January and September 2022 stood at a three-year high of 30.3 million sq ft, backed by strong supply completions with healthy pre-commitments. On a quarter-on-quarter (Q-o-Q) basis as well, net absorption for the July-Sep quarter was up by 11% and recorded at 9.86 million sq. ft, as per JLL’s Office Market Update-Q3, 2022.

Net absorption is calculated as the new floor space occupied less floor space vacated. Floor space that is pre-committed is not considered to be absorbed until it is physically occupied. Gross leasing refers to all lease transactions recorded during the period, including confirmed pre-commitments, but does not include term renewals. Deals in the discussion stage are not included.

Among the four metros, Hyderabad led the way with a 31% share of net absorption, with Mumbai pushing Bengaluru to the third spot, followed by Delhi NCR. These four cities combined for an 83% share of net absorption in the quarter.

Bengaluru leads in terms of 9-month net absorption levels, followed by Hyderabad and Mumbai. All the top seven cities have seen the 9-month net absorption for 2022 at much higher levels against the corresponding period of 2021. On a pan-India basis, net absorption is also up by 107% year-on-year for the nine-month period. The Jan-Sept 2022 net absorption is also 90% of the corresponding number for 2019.