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Tech firms dominated office leasing in Q4, 2022

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Hyd office space driven by small-sized deals

Hyderabad office space was driven by small-sized (less than 50,000 sq. ft.) deals. CBRE South Asia Pvt. Ltd, India’s real estate consulting firm, on Friday announced the findings of its latest office report, ‘CBRE India office figures Q4 2022’. According to the report, space absorption in Hyderabad stood at 2.4 mn. sq. ft. while supply stood at 3.8 mn. sq. ft. in Q4 2022. Key sectors that drove absorption included technology (35%), BFSI (14%) and engineering & manufacturing (12%).

According to the report, space take-up was witnessed across IT, non-IT and SEZ segments with a share of 48%, 27% and 25%, respectively. Moreover, the report further highlighted the key transactions recorded during Q4 2022 in the city being Netcracker Technology leased 200,000 sq. ft. in DivyaSree Tech Ridge P2 (Phase 2), IDFC First Bank leased 180,000 sq. ft. in Aurobindo Galaxy and UrbanDesk leased 130,000 in Gowra Palladium (Phase – 1).

As per the report findings, Bengaluru, Delhi-NCR, Mumbai and Hyderabad accounted for nearly 75% of the yearly leasing activity.

On an annual basis, technology corporates drove leasing with a share of 29%, followed by flexible space operators (14%), engineering & manufacturing companies (13%), BFSI firms (13%), and research, consulting & analytics organisations (7%). The report points out that small- (less than 10,000 sq. ft.) to medium-sized (10,000 – 50,000 sq. ft.) transactions dominated leasing in 2022 with a share of 85%, similar to the trends observed in 2021. The share of large-sized deals (greater than 100,000 sq. ft.) remained at 7%. Bengaluru followed by Delhi-NCR and Pune dominated large-sized deal, while a few such deals were also reported in Hyderabad, Mumbai, Chennai, and Ahmedabad. A marginal reduction in quoted rentals was also seen in the Extended IT Corridor in Hyderabad due to supply pressures. Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “With a sustained recovery in leasing, moderating vacancy levels and persistent demand for investment-grade assets, the rental recovery continued across cities throughout 2022.

With the relaxation of COVID-19 restrictions, the release of pent-up demand, and a gradual acceleration of return-to-office (RTO) plans by occupiers propelled leasing momentum.

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