Robust growth of IT/ITeS sector, affordable rentals & start-up boom have worked in favour of Southern office markets

  • Of 21.32 mn sq. ft. net absorption in FY21 across the top 7 cities, Bengaluru, Chennai & Hyderabad accounted for a 66% share, followed by West (MMR & Pune) with 21% & North (NCR) with 11%
  • Back in FY18, South cities comprised a 47% share, West – 33%, North – 17%
  • Office supply – of 40.25 mn sq. ft. of new office space completion in FY21, South cities dominated with a 63% share; West – 19%, North – 18%
  • Southern office rentals saw double-digit growth (11-15%) in this period; other regions lagged behind

Mumbai, 13 September 2021: The main South India office markets have overtaken other regions in terms of new supply, net absorption, and even rental growth. Among the top 7 cities, Bengaluru, Hyderabad, and Chennai saw their share of total office leasing increase to 66% in FY21 (against 47% in FY18).

The net office absorption in FY21 in the top cities was 21.32 mn sq.

COVID-19 has driven a lot of latent demand into tier 2 and 3 cities. This demand is driven by the improved economic growth, infrastructural developments, lower cost of living and more attractive real estate prices in these cities.
At least 67% (or approx. USD 67 bn) of the total loan advances (USD 100 bn) to Indian real estate by banks, NBFCs and HFCs is currently completely stress-free, reveals the latest study by ANAROCK Capital. Another 15% (approx. USD 15 bn) is under some pressure but has scope for resolution with certainty on at least the principal amount.
As per latest ANAROCK data, of the total sales made in the first nine months of FY2021 (approx. 93,140 units) across the top 7 cities, the top 8 listed players’ share stood at 22% while non-listed leading players’ share was 18%. Non-branded developers accounted for a 60% share
Fractional ownership platforms attract investors interested in not just building future income (in case of commercial or even residential properties) but also in accessing the property (resorts or vacation homes) personally for a specific period