Pune, fifth April 2023: CBRE South Asia Pvt. Ltd, India’s main actual property consulting agency, as we speak introduced the findings of its newest workplace report ‘CBRE India Office Figures Q1 2023’. The report findings acknowledged that the workplace sector in Pune witnessed gross absorption of ~1.2 million sq. ft. and provide of ~1.7 million sq. ft. in Jan-Mar’23.  In Pune, key sectors that drove absorption included expertise (33%), versatile house operators (30%), analysis, consulting & analytics (15%).

Key transactions recorded in Pune in the course of the Jan-Mar’23 interval have been:

• Alliance Bernstein leased 55,000

1. ft. inB5 / Gera Commerzone II R-3

• Deloitte leased 50,000 sq. ft. in Westend Gateway
• SAP Labs leased 35,000 sq. ft. in International Tech Park Phase 1 Kharadi

On a pan-India foundation, the report highlighted that workplace leasing exercise elevated by 9% Y-o-Y and touched 12.6 mn. sq. ft in the course of the Jan-Mar’23 interval. Bangalore, Delhi-NCR and Chennai accounted for 62% of the general transaction exercise in the course of the quarter.

Development completions of about 11.6 million sq. ft. have been recorded in Jan-Mar’23, a rise of 31% Y-o-Y. Bangalore, Delhi-NCR, Pune and Hyderabad led provide addition in the course of the quarter, accounting for a cumulative share of almost 82%. The non-SEZ phase dominated improvement completions with a share of about 88%, which went up from 82% throughout the identical interval within the earlier yr. The report factors out that almost half of the newly accomplished developments in the course of the present quarter have been green-certified (LEED or IGBC), indicating a powerful emphasis on sustainability.

In distinction to the earlier quarters, the place expertise corporates dominated leasing exercise, BFSI companies and versatile house operators drove house take-up within the Jan-March quarter with a share of about 22% every. This was adopted by expertise corporates (20%), engineering & manufacturing firms (11%) and analysis, consulting & analytics organizations (10%). Medium- to large-sized deal closures by world functionality centres of BFSI corporates, Indian banks and home flex operators dominated leasing exercise within the Jan-Mar’23 quarter. This indicated a divergence in workplace absorption tendencies in comparison with earlier quarters. The cumulative share of BFSI companies and versatile house operators grew from 20% in Oct-Dec’22 to 44% throughout Jan-Mar’23 on account of a major enhance in large-sized deal closures.

Similar to the earlier quarter, home companies overtook American firms by way of quarterly leasing, accounting for almost half of the leasing exercise within the Jan-Mar’23 quarter. This leasing exercise was primarily led by versatile house operators, BFSI companies and expertise corporates.

Small- (lower than 10,000 sq. ft.) to medium-sized (10,000 – 50,000 sq. ft.) transactions drove workplace house take-up in Jan-Mar’23 with a share of 84% – a marginal lower on a Q-o-Q foundation. The share of large-sized offers (larger than 100,000 sq. ft.) in Jan-Mar’23 remained just like the earlier quarter at 6%. Bangalore, adopted by Delhi-NCR, Hyderabad and Chennai dominated large-sized deal closures in Jan-Mar’23, whereas just a few such offers have been additionally reported in Pune.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, stated, “Short-term macroeconomic pressure caused by monetary tightening, inflation, the anticipated slowdown in developed nations, and geopolitical difficulties might impact occupiers’ expansion plans and decision-making in 2023. However, the impact of these situations on the leasing decisions of multinational corporations has not yet been identified. Going forward, leasing activity could pick up, especially in the second half of 2023, as India will continue to be an attractive and affordable source of high-skilled talent which will lead to corporates looking at the country for business sustenance during this period globally.”

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, stated, “In line with past trends, Bangalore, Delhi-NCR and Hyderabad are expected to continue to drive absorption, while Chennai, Mumbai, Pune and Kolkata would also witness robust space take-up. Select tier-II markets would also continue to attract corporates’ attention as the next growth destinations due to improving infrastructure and the presence of a large talent pool.”

Other observations

Key Observations:

• The non-SEZ phase dominated improvement completions with a share of about 88%, which went up from 82% throughout the identical interval within the earlier yr.
• Similar to the earlier quarter, home companies overtook American firms by way of quarterly leasing, accounting for almost half of the leasing exercise in Jan-Mar’23.  This leasing exercise was primarily led by versatile house operators, BFSI companies and expertise corporates.
• With sustained leasing exercise and protracted demand for investment-grade belongings, rental restoration continued throughout choose micro-markets in just a few cities in Jan-Mar’23.
• During the quarter, quoted leases witnessed a Q-o-Q enhance of 1-10% in E PBD, PBD, Sub CBD and CBD in Kolkata; 1-8% in MPH Road, Off CBD, CBD, OMR 1 and OMR 3 in Chennai; 1-4% in Noida-Greater Noida Expressway, Golf Course Road and Old Gurgaon in Delhi-NCR; 1-2% in PBD-W in Bangalore.

Key Themes in 2023:

• Occupiers and staff are anticipated to desire office-based working for higher collaboration, engagement, tradition, compliance and innovation together with the persevering with prevalence of hybrid working.
• Occupiers would proceed to ramp up their return-to-office (RTO) plans and give attention to formulating long-term hybrid working insurance policies. The resultant rise in occupancies is prone to fluctuate by sector / group.
• As materials and gasoline value rise moderated in direction of the top of 2022, development & fit-out value inflation is anticipated to proceed to ease in 2023. In response to elevated value ranges, doable methods for occupiers might embody adjusting fit-out budgets for value escalation, requesting addition fit-out intervals from landlords, renewing leases in at the moment occupied areas, looking for absolutely fitted areas or contemplating versatile house choices.
• Tightening ESG laws would require common reporting by occupiers within the coming years. Occupiers are thus anticipated to proceed to show a flight-to-quality wave in direction of premium and sustainable areas within the medium to long run.
• The intense give attention to RTO planning and hybrid working would proceed to result in the growing significance of office methods in company agendas. The want for productive interactions with related co-workers would require the appropriate areas, instruments, companies and experiences that can’t be simply recreated outdoors the workplace, for which occupiers might revisit office design requirements.