Work From Office Starts? Office Occupancy Increases By 10% Across These Cities (Report)

The country’s real estate sector, including residential housing, is not immune to the devastation caused by the onset of the coronavirus pandemic in 2020.

Despite the disruptive second COVID-19 wave the real estate sector has started to show signs of resilience and regained momentum, this year.

Positive Outlook For 2022

In spite of the emerging risks over the Omicron variant, sectoral experts are positive in their outlook for 2022. 

Let’s go through the key housing trends for the coming year. 

last year, overall office gross absorption across the top six cities was at about 33 million square feet (sq ft).

Which is 10% higher than 2020 as per the report by property consultant Colliers said.

City Level Performance

Coming to the city level, all regions except Bengaluru and Delhi-NCR surpassed the annual average absorption of 2016-2018. 

On the other hand, Hyderabad had witnessed strong recovery gains in 2020 and continued to maintain its streak in 2021.

Followed by Chennai and Mumbai as they have gained significant scale during the year attributable to a strong fourth quarter building on the momentum of the previous quarter.

Similarly, the total pan-India vacancy levels stood at 18.5% in the fourth quarter of 2021 which is a 40-basis point increase from the previous quarter.

Signaling a strong revival in occupier confidence, Pan-India absorption during the year surpassed the annual gross absorption by 7% compared to 2016-2018. 

Increased Occupancy In Fourth Quarter

During the fourth quarter of 2021, the level of occupancy also increased in prominent office micro markets across the top three cities compared to the previous quarter.

The development seems to be led by a gradual revival in demand and fewer occupier exits.

Coming to new supply, similar to levels of 2020, 2021 also saw 35 million sq ft as developers went into ‘wait-and-watch’ mode yet aligning new supply in response to market demand.

 The senior director and head of research at Colliers India, Vimal Nadar said, “Office occupancy is likely to rise in prominent office districts with quality grade A stock. Occupiers have already started preferring next-generation offices. In tune with this, we expect supply in 2022 to be around 35-38 million sq ft, four percent higher than 2021 levels,”.