According to the report, Grade A Office Space sector is projected to reach 1 Billion Square feet by 2030
22 June 2023: Amidst the country’s booming demand for premium workplaces across Tier 1 cities, Grade A offices in India crossed a significant milestone of 700 million square feet, according to a report jointly launched by CREDAI and CRE Matrix. It further projects that the particular segment within the office space sector will reach 1 billion square feet by 2030, owing to strong industry fundamentals and sustained demand. The study also reveals that Co-working, which has seen tremendous growth in the last 5 years, crossed its own milestone of 50 million square feet, contributing to about 7% of total office inventory in top 6 cities of India.
The report stresses on the key drivers behind this sustained growth - low-cost advantage, competitive wages, and strong talent pool - leading to higher growth rentals signed in Q1, 2023, witnessing a rise of 5% from the average Rs 92 per square feet across Top 6 cities in India - the second highest in the last 10 quarters. Despite this increase, 2023 is expected to witness leasing demand of more than 45 million square feet in the respective regions, with Bangalore and MMR projected to continue to lead this wave in the second half of the year, with demand exceeding the supply in both markets in Q1, 2023. Both Bangalore, MMR also accounted for 55% to overall India’s office demand in the same quarter.
Apart from co-working, IT/ITes, BFSI industries have witnessed a hike in demand for expansion, spurred on by start-ups and global capacity centers. Due to the same, overall vacancy in top 6 cities came down to 16.7% - lowest in the last 6 quarters.
CREDAI President Boman Irani, said, “The consistent growth of the Indian commercial real estate sector is highly commendable. This growth can be attributed to several factors, including the country's strong economic fundamentals, the rise of new-age industries, and the increasing influx of multinational corporations. We have witnessed the emergence of innovative office designs, state-of-the-art infrastructure, and advanced technology integration, all contributing to the attractiveness of our commercial properties. India’s office stock has crossed a monumental milestone, surpassing 700 million square feet (msf). This remarkable accomplishment demonstrates the robust growth and immense potential of our nation's commercial real estate market. In addition to this significant milestone, I am thrilled that India's co-working space has expanded rapidly, reaching an impressive 50 msf. This achievement is a testament to the evolving nature of the workplace and the increasing demand for flexible and collaborative work environments. It also underscores our successful efforts in catering to modern businesses' changing needs and preferences.”
CEO CRE Matrix and IndexTap Abhishek Kiran Gupta, said “The 700 msf milestone is a significant one as the last 5 years have seen 25% of this 700 msf stock come to life. Apart from India’s strong economic fundamentals, the rise of new-age industries, and the increasing influx of multinational corporations, our office developers have been extremely innovative and ESG-conscious to keep the buildings at par with global standards. The proof lies in the strong rental growth witnessed despite flattish demand in this quarter.
In addition to this significant milestone, I am thrilled that India's co-working space has expanded rapidly, reaching an impressive 50 msf. This achievement is a testament to the evolving nature of the workplace and the increasing demand for flexible and collaborative work environments. It also underscores our successful efforts in catering to modern businesses' changing needs and preferences.
The Confederation of Real Estate Developers' Associations of India (CREDAI) is the apex body of private Real Estate developers in India, established in 1999, with a vision of transforming the landscape of the Indian Real Estate industry and a mandate to pursue the cause of Housing and Habitat. Today, CREDAI represents 13000+ Developers across 221 city chapters in 21 states and plays an important role in policy formulation by representing the views of its members to various Ministries at regular intervals.
About CRE Matrix
CRE Matrix was founded by real estate researchers who identified challenges faced by developers, landlords, brokers, banks etc. after working with them for decades. Through Machine Learning algorithms, CRE Matrix is delivering cutting-edge insights at lightning speed to all stakeholders for fast and profitable decision-making. Since inception, our mission has been to make all stakeholders smarter though authentic transaction data.