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In 2023, India's six major cities witnessed a remarkable surge in office gross leasing absorption, achieving an unprecedented high of 62.3 million square feet, marking a 12% growth from the previous year. This insightful data was revealed in a report by Savills India, a renowned real estate advisory firm. Among these cities, Bengaluru, Delhi-NCR, and Mumbai emerged as the top performers, collectively contributing to nearly 60% of the overall gross leasing activity.
Mumbai's real estate market experienced an extraordinary surge in leasing activity, totalling 10.1 million square feet, attributed primarily to substantial transactions by tech and consulting occupiers. This represented a staggering 51% increase compared to the figures from 2022. Similarly, Chennai and Mumbai also showcased record-breaking leasing activities throughout 2023, as outlined in the report.
The cities spotlighted in the report encompass Bengaluru, Delhi-NCR, Mumbai, Hyderabad, Chennai, and Pune.
The report highlights Bengaluru's consistent dominance in leasing activity, leading the charts with 15.6 million square feet. However, despite its supremacy, the city experienced a 10% year-on-year decline in gross absorption, primarily due to a 15% decrease in leasing activity by tech occupiers.
Delhi-NCR maintained comparable absorption levels to those of 2022, recording 11.3 million square feet, followed by Hyderabad and Chennai. Both cities reported significant annual increases of 34% and 32% in gross leasing activity, respectively, reaching 8.6 and 9.6 million square feet.
In contrast, Pune reported leasing 7.1 million square feet of office space, marking an 11% increase from the 6.4 million square feet reported in 2022, according to the report.
Regarding new supply, 2023 witnessed levels similar to the preceding year, totalling 53.3 million square feet. Notably, Bengaluru and Hyderabad accounted for approximately 61% of this new supply, according to the report.
As the year 2023 draws to a close, the real estate landscape in India's major cities stands as a testament to the resilience and adaptability of the office market. The remarkable surge in leasing activity, particularly in key cities like Mumbai, Chennai, and Bengaluru, signals a promising trajectory for the industry. The consistent influx of new supply, primarily concentrated in key hubs like Bengaluru and Hyderabad, underscores the evolving dynamics within India's commercial real estate sphere, setting the stage for a progressive and dynamic landscape in the coming years.
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