Office space demand up by 50% on year-on-year basis in 2021, global real estate consultancy firm says

Demand for office space in Delhi NCR region has grown 50 per cent year-on-year in 2021, majorly due to strong absorptions by startups and technology firms, said global real estate consultancy firm Colliers.

In 2021, total absorption in the office space segment was 6.3 million square feet, it said. Of the total, startups absorbed 1 million square feet.

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"Gurugram led the leasing activity accounting for 64 per cent share in overall transactions. Flight to quality is driving occupiers` real estate strategy and Noida Expressway, Golf Course Extension Road and DLF Cybercity drove the bulk of leasing activity as they looked for better-quality buildings," it added.

With more than 25 years presence, Colliers, a Nasdaq-listed company, is a professional consultancy firm which provides advice to real estate occupiers, owners and investors with operations in 67 countries.

"For north India, only the NCR can boast in terms of significant office absorption as the other major cities have not chosen office markets. Hub`n`spoke models have not been successful due to the mindset of the workforce still choosing to move to major metros.

"Co-working transactions have been the preference for most occupiers and will continue to be the preference for Occupiers throughout 2022 until there is an end to the uncertain environment created due to the pandemic," said Bhupindra Singh, Managing Director, Regional Tenant Representation and Office Services, North India, Colliers.

"...The overall absorption numbers indicate a strong desire for corporates to commit to the office segment and thereby showcasing that the WFH is an interim option only."

Besides, demand for flex spaces grew threefold during the calendar year.

Going forward, rentals in key micro markets like Cyber City, Sector 16 A and 16B Noida, Golf Course Road and Sector 62 are expected to see a gradual rise due to the limited availability of quality stock, Colliers said.