According to a recent survey by CBRE South Asia Pvt. Ltd., Hyderabad is emerging as the second-largest city, after Bengaluru, in the upcoming wave of office space supply in India. The report, titled "Office Space Revolution," foresees a significant growth in office supply completions across the top seven cities in the country, projecting a surpassing figure of 165 million square feet between 2023 and 2025. This indicates a substantial increase from the 142 million square feet recorded between 2020 and 2022.
The positive forecast of the report is driven by the confidence of developers, signaling a promising future for the Indian real estate industry. With over half of the anticipated new office space supply in the upcoming years, Hyderabad and Bengaluru are positioned to spearhead this wave of development. The report forecasts Bengaluru to dominate office space supply between 2023 and 2025, contributing 29% of the total supply in India, while Hyderabad follows closely at 20%, Delhi-NCR at 17%, Pune at 12%, Chennai at 11%, Mumbai at 9%, and Kolkata at 2%.
The research examines the precise locations of the forthcoming office projects, emphasizing significant completions in Hyderabad's IT Corridor II and Extended IT Corridor.
Anshuman Magazine, Chairman and CEO of CBRE India, South-East Asia, Middle East & Africa, conveyed optimism regarding the strong growth of the Indian office market. He emphasised the significant supply completions as a promising sign for the sector, projecting an average annual growth in office supply of 17% and an average building size increase of 18% between 2020 and 2022. The period from 2023 to 2025 is expected to witness an even faster growth rate, averaging 15–18%, driven by growing occupier demand and developers' expansion plans. India's cost and size advantages are expected to sustain its appeal as a favored destination for the establishment of Global Capability Centres (GCCs) across diverse industries.
Ram Chandnani, Managing Director of Advisory & Transactions Services at CBRE India, emphasized the ongoing attractiveness of India as an investment destination for investors from North America and Europe , Asia Pacific region. With foreign investment reaching USD 2.8 billion in 2022, marking an impressive 80% year-over-year increase, India stands out as the only market in the entire APAC region to experience yearly growth in capital deployment.
Even in the current economic conditions, IT spending in India is projected to consistently grow until 2023. This resilience is attributed to companies' continuous emphasis on improving worker productivity, enhancing client experiences, and streamlining processes. Notably, the BFSI, technology, and pharmaceutical sectors emerge as the primary drivers of office space demand, accounting for over 50% of lease activity from January to September 2023, with expectations of sustained long-term leasing activity.
The research also highlights a positive trend in hiring in India, with a substantial upswing in 2022 and a modest increase in the total number of jobs compared to the previous year. The forecast suggests a continued rise in the yearly employment rate of office professionals in the six major cities, projecting an 11% increase in 2023. This presents an optimistic outlook for the labor market and career opportunities in the nation, indicating an increase in economic activity and a demand for skilled workers.
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