Office space leasing increased by 89% QoQ in Q3 2021: Colliers

                The top six cities of India noted about, 10.3 million sq ft of office gross absorption in Q3 2021, the highest volume recorded since Q1 2020. After a devastating pandemic second wave 
in the second quarter, the overall absorption numbers rose by 89% QoQ as occupiers planned for a gradual reentry and closed deals that were onhold, leveraging tenant favourable
market dynamics, the report mentioned.

IT sector driven cities Hyderabad, Bengaluru and Pune accounted for 62% of gross absorption in Q3 2021. With increased number of fully vaccinated employees returning to their 
workplaces coupled with fewer restrictions on mobility, the office market is showing strong signs of revival.

“The quarter has brought in much-needed cheer for the market. Large deals made a comeback, led by demand from flexible workspace operators. Decisionmaking by occupiers has 
become quicker than in 2020. We can expect the optimism to strengthen over the upcoming quarters, provided there is no third wave. Occupiers who were exploring renewal options 
have begun looking for fresh space,” said Ramesh Nair, CEO (India) and MD(Market DevelopmentAsia) Colliers.

After an average performance in Q2 2021, Hyderabad emerged as one of the resilient cities in terms of demand supply dynamics. For the first time, Hyderabad had the maximum 
share in leasing volume at 2.5 million sq ft surpassing Bengaluru, as occupiers focussed on large block deals and even leasing entire buildings. BFSI and Flexible workplace sectors 
had the maximum share in leasing volume accounting for 66% of the total demand in Hyderabad. Rai Durg saw the maximum leasing traction accounting for 53% of
the demand, while Hitec City contributed 40%. On a YTD basis, Bengaluru continues to be the market leader, the report mentioned.

Leasing share by flexible workspace operators also rose in Q3 2021 owing to high demand from occupiers looking for managed spaces and short-term leases to tide over uncertain 
times. Share of flexible workspaces in leasing increased to 26% in Q3 2021. Leading flexible workspace operators focussed on signing large block deals exceeding 100,000 sq ft in 
almost all major cities seeing increased interest from corporates for managed spaces. Pune accounted for the highest share in flexible workspace, followed by Hyderabad,
according to the report.

The quarter saw the highest supply since Q2 2020 at 10.8 million sq feet in Q3 2021 with Hyderabad and Pune contributing the maximum share at 29% and 25% respectively. The 
second wave did not have a major impact on the construction activity. Developers continued to focus on leasing existing stock and received OCs for buildings with pre-commitments, 
report mentioned.

Source: The Economic Times