Office space absorption grows 66% YoY in Jan-Sept 2022, says CBRE

India’s office sector has witnessed a gross absorption of 42.1 million sq. ft. during the first nine months of 2022, registering a growth of 66% YoY, according to a report by CBRE. During the first nine months in 2022, Bengaluru, Delhi-NCR and Chennai accounted for 62% of the leasing on a cumulative basis.

Meanwhile, the sector’s gross absorption in the third quarter of calendar year 2022 was 12.7 million sq.ft. Bengaluru, Mumbai and Delhi-NCR accounted for 65% of the transaction activity in during the third quarter, the report said.

As the pandemic restrictions eased across the country, return to office picked up momentum in the third quarter of 2022. Office occupancies continued to rise in the July-September quarter compared to the prior quarter.

On a quarterly basis, technology corporates continued to lead leasing with a share of 24%, followed by flexible space operators (23%), BFSI players (20%), engineering & manufacturing companies (13%), research, consulting & analytics corporates (5%) and life sciences firms (3%) firms. The CBRE report noted that cumulative share of flexible space operators and BFSI firms grew from 22% in Q22022 to 43% during the review quarter due to an increase in large-sized deal closures.

Moreover, small- (less than 10,000 sq. ft.) to medium-sized (10,000 – 50,000 sq. ft.) transactions drove leasing activity with a share of 85%, which was largely stable on a QoQ basis. The share of large-sized deals (more than 100,000 sq. ft.) increased marginally to 7% in Q3 from 6% in Q2 of 2022. Bengaluru, Mumbai, Delhi-NCR and Hyderabad, dominated large-sized deal closures during the third quarter, while a few such deals were also reported in Pune, Chennai and Ahmedabad.

The report said that continued recovery in leasing, easing vacancy levels and continued demand for investment-grade assets led to rental recovery across cities. Multiple micro-markets in Delhi-NCR, Mumbai, Chennai, Pune and NBD Manyata in Bangalore witnessed a rental growth of 1-6% on a quarterly basis.


The CBRE report said that persistent high inflation across major economies and aggressive monetary tightening by global central banks will result in a mild economic downturn in several economies. The impact of this economic downturn on global corporates’ leasing in India is yet to be determined, but the country is likely to remain an attractive cost-effective option.

Meanwhile, the supply pipeline remains to be strong as high-quality, investment-grade supply by leading developers and institutional owners in prime locations would continue to draw flight-to-quality space take-up. Bengaluru, Hyderabad and Delhi-NCR are anticipated to continue to dominate supply in the coming quarters. 

Non-SEZ buildings would drive development completions, while the share of SEZ supply is likely to decline going forward. Moreover, SEZs are set to get a boost as a new draft bill is under discussion by the government to replace the existing SEZ law.

Stocks To Watch

Some of the companies to watch out for in this space are DLF, Godrej Properties, Oberoi Realty, Phoenix Mills, Prestige Estates, Brigade Enterprises, Sobha, Indiabulls Real Estate, Puravankara, Emami Realty, Ahluwalia Contracts, Omaxe, Arvind SmartSpaces, Ajmera Realty and Binny Ltd.