Hyderabad has beaten Bengaluru in new office supply growth for the financial year (FY) 2023, according to property consultant Anarock Private Limited. The report found that the first half of FY23 was better for the commercial office space market in the top seven cities, with Hyderabad seeing the highest supply influx at 14.94mn sq ft, accounting for 31% of the total supply. In contrast, Bengaluru witnessed 12.66mn sq ft of office supply completions, comprising a 26% share and 13% lower than the previous fiscal year.
Anarock Group’s Prashant Thakur said the robust growth seen in the office real estate market in the first half of FY23 was short-lived and that major headwinds, including layoffs by corporates and global recessionary trends, will continue to mar office space growth in India. Thakur added that the Indian economy is stronger than most developed nations, but the future bears watching.
In terms of average annual vacancy rates in average Grade A offices, Hyderabad saw a notable increase of 0.5%, while the remaining six cities experienced a decline ranging from 0.1% to 0.5%. Pune and Bengaluru led the pack with the highest y-o-y increase in average office rental values, with growth rates of 10% and 9%, respectively.
