Not Mumbai or Delhi, these cities dominate office market in India

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The office market in South India has overtaken other regions when it comes to new supply, net absorption, and rental growth.

Not Mumbai or Delhi, these cities dominate office market in India
Three South Indian cities — Chennai, Bengaluru, and Hyderabad — contributed to 66 percent of the total demand for office space in India in the financial year 2020-21, revealed the recently-released Anarock report. The share of the total office leasing in these cities was 47 percent in FY18.
The property consultant, in its report, said that the office market in South India has overtaken other regions when it comes to new supply, net absorption, and rental growth.
 "The remarkable growth in the office market of these three southern cities when viewed against their western and northern counterparts is directly attributable to robust demand by the IT/ITeS sector, affordable rentals, and the exponential growth of start-ups locally over the past few years," said Anarock Chairman Anuj Puri. He added that the manufacturing and industrial sectors are also driving demand in these three cities.
The office rentals also grew significantly between FY18 and FY21 in these cities. "Between FY18 and FY21, office rentals in each of the southern cities have also shown double-digit growth," said the report. During the period under review, office rentals in Bengaluru increased by 15 percent, in Hyderabad by 12 percent, and in Chennai by 11 percent.
Mumbai Metropolitan Region (MMR) and Pune collectively recorded a net office absorption of 4.56 million sq ft (21 percent). The same for National Capital Region (NCR) was 2.3 million sq ft (a mere 11 percent share).
While office rentals in MMR and NCR remained largely static, they grew by 8 percent in Pune.
In another of its report on residential housing, Anarock has predicted housing sales are likely to rise by 30 percent across seven major cities to nearly 1.8 lakh units in 2021. The seven cities are — Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Bengaluru, Hyderabad, Chennai, and Kolkata.