Quarterly Report

India Office | Q1 CY’23

JUNE 2023
 Executive Summary
Stock @ 700

India’s Grade A/A+ office stock, across top 6 cities, crossed a significant milestone of 700 msf
in Q1 CY’23. While the 1st half of this stock took 40 years to develop, the 2nd half has taken just
10 years. The last quarter of this total stock has come up in just the last 5 years, the fastest
pace India has ever seen in office development. To give a perspective, as of today India’s
office stock is 80% of total office stock of Manhattan and is projected to reach the Billion sqft
by 2030.

Demand & Rentals

Despite global headwinds pausing short term expansion plans, office demand in Q1 CY’23
matched the Quarter’s supply, portraying the sector’s resilience. India’s strong fundamentals,
low-cost advantage, competitive wages and strong talent pool has translated into rental
growth of leases signed in the quarter. Market rents, at a wt. average of INR 92 psf, increased
by 5% over previous quarter, the 2nd highest in last 10 quarters.
This not only is a re-affirmation of return-to-office policies but is also indicating how the Big
Three Pillars – IT/ITeS, BFSI and Co-working segments are fuelling demand via expansion.
Bengaluru and MMR office markets continued to be at the helm of office demand –
contributing 55% to overall India’s office demand in Q1 CY’23. The Big Three pillars of Office
Occupiers – Startups, Co-working players and Global Capability Centres have again been at
the forefront of office demand.
Flex @ 50
India’s co-working inventory reached the 50 msf milestone, contributing around 7% to overall
Office inventory. Co-working made a significant contribution of 10% to the demand for office
space in Q1 CY’23, allowing it to move up to the 3rd place in the pecking order. This surpassed
the contribution of Commercial & Professional Services, which was at 7% for the same
quarter.

Outlook
The year 2023 is expected to experience leasing demand of more than 45 msf. Bengaluru &
MMR are expected to drive office demand in 2023. Demand outstripped Supply by a ratio of
1.6 & 2.1 times in Bengaluru and MMR, respectively (last 8 quarters). The cities are currently
witnessing higher demand vs new supply, leading to a decrease in the vacancies. This trend
is expected to persist in near future.

Demand Supply Market Rent

Q1 CY’23 Q1 CY’23 Q1 CY’23

70%
of Last 10 Quarters’ Avg.
83%
of Last 10 Quarters’ Avg.
9%
vs Q1 CY’22

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q1 CY’23 2
Fundamentals
Demand, Supply & Vacancy
Q1 CY’23 Demand (msf) 8.6 Demand Supply Vacancy

Q1 CY’23 Supply (msf) 8.7

20
17.0%
Current Grade A Stock (msf) 701.6 16.8% 19%
16.8% 16.9% 17.1% 16.7%
16.4% 16.6%
16 17%
Total Vacancy 16.7% 14.4% 14.8%

16.1
14.7%

15.5
15%

18.5

14.7
msf.
12

15.7
13.1
Current Passing Rent * 13%

12.1
8.4

12.0
11.7
84

11.4
11.1

10.9
(₹/sqft/month)

10.3

10.3
8 11%

9.3
8.7

8.7
8.6
8.0
Current Market Rent ^

7.4
9%
92
(₹/sqft/month) 4

5.6
7%
Upcoming Supply (msf)
196.8 0 5%
(2023 – 2025)
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23

City-wise Highlights
Contribution to Office Demand in
PAN INDIA

Q1 CY’23
Bengaluru & MMR
IT/ITeS 30% Contributed

55%
To Q1 CY’23
Demand

BFSI 16%

Co-working 10% NCR & Pune

Contributed

53%
To Q1 CY’23
Supply

Passing Rent & Market Rent

Passing Rent * Market Rent ^ City-Share in Q1 CY’23

100
Demand
Wt. Avg. Rentals (INR / sqft / month)

94 92
88
90 33% 22% 17% 5% 8% 15%
84 84
82 81 82
81 79 80
80 84

76 76 77 78 79 80 81 81 82
Supply 3%
70 75

32% 15% 14% 15% 21%

60
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23

Note
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q1 CY’23
Fundamentals Demand, Supply & Vacancy
Q1 CY’23 Demand (msf) 2.8 Demand Supply Vacancy

10 9%
8.1%
Q1 CY’23 Supply (msf) 1.2 7.7% 8.0% 7.9% 7.8%
9 7.6% 8%
7.5% 7.2%
8 6.9%
6.2% 7%
Current Grade A Stock (msf) 195.8
7
6%

7.4
5.3%
6
Total Vacancy 7.2% 5%
5

msf
4%

5.0

4.9
4

4.6
Current Passing Rent *

4.6
4.5

4.5
77 3%
(₹/sqft/month)

3.9
2.5
3

2.4
3.7

3.4
3.2
2%

3.0

1.5
2

2.8
Current Market Rent ^
85

2.4

2.3
2.1
(₹/sqft/month)

2.0
1 1%

0.4

1.2
Upcoming Supply (msf) 0 0%
55.0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
(2023 – 2025)
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23

Demand
to Supply Ratio Major Office
BENGALURU

2.3X
Q1 CY’23
Transactions

Google,
Bagmane World Technology Center
Q1 CY’23 690,051 sqft | ₹224*
Market Rent

11%
vs Q1 CY’22
Reliance,
IBC Knowledge Park
571,447 sqft | ₹80

Google (Tablespace),
Primeco Union City
458,063 sqft | ₹123*#
Passing Rent & Market Rent
Passing Rent * Market Rent ^ Symbol Technologies,
Bagmane Solarium City Business Park
247,786 sqft | ₹65
90
85
Wt. Avg. Rentals (INR / sqft / month)

85
*Base + Fit-out Rents
78 # Pre-leased Deal
80 77
76 75
74
72 71 71 72
74 76
77 Sector Occupancy
70 73 73
70 74
69 70
67 68
60
48% 10% 8% 6%5% 23%

50
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 IT /ITeS BFSI
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23
Com mercial & Co- Wor king
Note
Pr ofess ional Serv ices
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region Indust rials Other s
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q1 CY’23 4
Fundamentals Demand, Supply & Vacancy

Q1 CY’23 Demand (msf) 1.9 Demand Supply Vacancy

Q1 CY’23 Supply (msf) 1.3

5 24%
22.7%
22.8%
Current Grade A Stock (msf) 118.1 22.0% 20.6%
22%
4 22.5%
21.4% 19.5% 19.4%

msf.

3.1
18.9% 20%
Total Vacancy 19.4% 18.9% 18.7%

4.1

3.5
3

3.0
18%

2.8

2.5
Current Passing Rent *

2.7
127 2

1.6
(₹/sqft/month) 16%

1.9

1.9
1.8
1.8

1.8
1.5
Current Market Rent ^ 1
129 14%

1.3
1.2

1.2

1.2
(₹/sqft/month)

0.7
0.1
0.2

1.0
0 12%
Upcoming Supply (msf)
29.2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
(2023 – 2025)
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23

Demand
Major Office
(Mumbai Metropolitan Region)

to Supply Ratio

1.5X
Q1 CY’23
Transactions
MMR

Piramal Finance,
Q1 CY’23 Vacancy Agastya Corporate Park
126,674 sqft | ₹95

2.6%
Vs Q1 CY’22
UpGrad Education,
Sunteck BKC 51
121,166 sqft | ₹289

Pidilite Industries,
Opus Prime
109,496 sqft | ₹164
Passing Rent & Market Rent
Passing Rent * Market Rent ^ Tablespace,
Gigaplex (Airoli W)
146 79,611 sqft | ₹56
150
Wt. Avg. Rentals (INR / sqft / month)

140 134 134

128 131 130
130 123 127

120
118 119
125
129 Sector Occupancy
121 122 122 123
117 118 120 117
110 117
111
100
29% 23% 10% 6%5% 27%
90
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 BFSI IT/ITeS

Commercial & Co-Working

Note Professional Services
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter
Health Care Others

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q1 CY’23 5
Fundamentals Demand, Supply & Vacancy

Q1 CY’23 Demand (msf) 1.5 Demand Supply Vacancy

Q1 CY’23 Supply (msf) 2.8

5 26%
25.2% 24.8%
Current Grade A Stock (msf) 139.6 25.1% 24.9%
24.8% 24.4% 24.5% 24.5%
4
24%

4.1
22.8%

msf
Total Vacancy 24.8%
3

2.9
22.6% 22%

2.7
22.3%

2.8
Current Passing Rent *
88 2

2.3
2.4

2.4
(₹/sqft/month)

2.3

2.2
1.3

2.0

1.9
20%

1.5
Current Market Rent ^

1.5

1.5
1

1.5
76

1.3
(₹/sqft/month)

0.9
0.8

1.0
0.8

0.9
0 18%
Upcoming Supply (msf)
37.4 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
(2023 – 2025)
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23

Demand
to Supply Ratio Major Office

0.5X Transactions
(National Capital Region)

Q1 CY’23
NCR

HDFC,
Ace Capitol, Noida
Q1 CY’23 Market
299,233 sqft | ₹49#
Rentals

7%
vs Q4 CY’22
Air India,
Vatika One on One (Gurgoan)
170,100 sqft | ₹105

Sopra Banking Software Solutions,

Digital Park IT Campus, Noida
102,278 sqft | ₹72
Passing Rent & Market Rent
Passing Rent * Market Rent ^ Infosys (Simplioffice),
Ace Capitol, Noida
94,914 sqft | ₹88
100
Wt. Avg. Rentals (INR / sqft / month)

90
88 86 87 # Pre-leased Deal
90
82 84 85 86
82
89
80 88
83
70
79 80 81
76 77
83 84 84
82 Sector Occupancy
76

60

50
34% 14% 13% 6% 5% 28%
40
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 IT /ITeS Com mercial &
Pr ofess ional Serv ices
BFSI Co- Wor king
Note
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter
Telecommunication Serv ices Other s

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q1 CY’23 6
Fundamentals Demand, Supply & Vacancy
Q1 CY’23 Demand (msf) 0.7 Demand Supply Vacancy

Q1 CY’23 Supply (msf) 1.3

8 30%

Current Grade A Stock (msf) 108.2 7

23.7% 24.1%
25%

6.9
6 18.9% 22.5%

Total Vacancy 24.1% 19.0%

msf.
5 16.1% 19.0% 20%
17.9% 22.0%
17.1%
4 18.8%
Current Passing Rent *

4.2
62 15%

2.5
(₹/sqft/month) 3

3.6

3.5
3.2
2.9

2.6
2.6

2.9
2
Current Market Rent ^ 10%
65

2.0
(₹/sqft/month)

1.8
1

0.7
1.6

1.2
1.5

1.5
0.7
1.4

1.3

1.3
0.8
0 5%
Upcoming Supply (msf)
45.5 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
(2023 – 2025)
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23

Q1 CY’23 Demand Major Office

HYDERABAD

25%
vs Q4 CY’22
Transactions

Netcracker Technology Solutions,

Q1 CY’23 Market Divyasree Techridge
Rentals 209,927 sqft | ₹79

5%
vs Q4 CY’22
Sify Infinit Spaces,
Survey No. 115/1 (Hyderabad)
152,325 sqft | ₹42.4

Discovery Communication,
V Ascendas IT Park (ITPH) Ph 1 (Block A)
88,651 sqft | ₹70
Passing Rent & Market Rent
Passing Rent * Market Rent ^ Web Werks India,
Kala Jyothi Building
87,865 sqft | ₹50
80
Wt. Avg. Rentals (INR / sqft / month)

69
70 66 65
64
62

60 56
60
58
56 57
58 Sector Occupancy
61 62
59 60
59 58
56 57
50 55 55
54
47% 13% 12% 8% 7% 13%
40
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 IT /ITeS Com mercial &
Pr ofess ional Serv ices
BFSI Co- Wor king
Note
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter
Healt h Care Other s

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q1 CY’23 7
Fundamentals Demand, Supply & Vacancy

Q1 CY’23 Demand (msf) 0.4 Demand Supply Vacancy

Q1 CY’23 Supply (msf) 0.3 3 17%

16.3% 16.0%
15.9% 15.7%
15.5% 15.6% 16%
15.2% 15.3% 16.2%
Current Grade A Stock (msf) 67.5 15.5% 15%

2.4
2 14.9% 14%

msf.
Total Vacancy 15.7%

2.0
13%

12%

1.5
Current Passing Rent *
67

1.3
(₹/sqft/month) 1 11%

1.2
1.1

1.1

1.0
0.8
10%
Current Market Rent ^
74

0.6

0.7

0.7
0.7

0.6
(₹/sqft/month) 9%

0.4
0.5

0.3

0.3

0.3
0.5
0 8%
Upcoming Supply (msf)
15.1 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
(2023 – 2025)
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23

Demand
to Supply Ratio Major Office

1.3x Transactions
CHENNAI

Q1 CY’23
Qualcomm#
Ramanujan IT City (Intellion Park)
450,222 sqft | ₹82
Q1 CY’23 Vacancy

0.5%
Vs Q1 CY’22
Work Easy Space Solutions,
Featherlite The Address
62,599 sqft | ₹30

Caresoft Global,
One Indiabulls Park (Kosmo One)
25,499 sqft | ₹37
Passing Rent & Market Rent
Illumine Industries,
Passing Rent * Market Rent ^
DLF IT Park
22,717 sqft | ₹73
80
Wt. Avg. Rentals (INR / sqft / month)

74 # Pre-leased Deal
72
69 68
70
65
62
64 65 65 64 Sector Occupancy
60 66 67
66 66
60 63 64 63 5%
63
60 61
61
51% 14% 7% 5% 17%
50
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 IT /ITeS BFSI

Com mercial & Indust rials

Pr ofess ional Serv ices
Note
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region Healt h Care Other s
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q1 CY’23 8
Fundamentals Demand, Supply & Vacancy
Q1 CY’23 Demand (msf) 1.3 Demand Supply Vacancy

Q1 CY’23 Supply (msf) 1.8

4 14.4% 14.7% 16%
13.4% 13.0%
Current Grade A Stock (msf) 72.4 12.2%
12.8% 14%

3 12%

3.2
Total Vacancy 14.7% 10%

msf.

2.7
6.5% 8.1%
8.2%
2 6.8% 8%
Current Passing Rent *

2.1
77
5.1%

1.9
(₹/sqft/month) 6%

1.8
0.9

1.5
1 4%

1.3
Current Market Rent ^

1.2

1.2
79

1.1
1.0

1.0
(₹/sqft/month)

0.9
2%

0.8

0.4
0.2
0.5

0.5

0.1

1.1
Upcoming Supply (msf) 0 0%
14.6 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
(2023 – 2025)
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23

Q1 CY’23 Demand Major Office

8%
vs Q1 CY’22
Transactions
PUNE

Tablespace,
Panchshil Business Park
Q1 CY’23 Market Rent (Viman Nagar)

8%
297,203 sqft | ₹95

vs Last 10 Quarter Knorr Bremse Technology,

Average Avni Terminal 1
172,232 sqft | ₹37.8

STT Global Data Centres India,

Passing Rent & Market Rent Survey No. 56,57 (Dighi)
123, 260 sqft | ₹106.6
Passing Rent * Market Rent ^

Awfis,
90 Nyati Enthral
Wt. Avg. Rentals (INR / sqft / month)

82
79
77 79 118,153 sqft | 70% RS
80 75
73
72 70 71
69
70 68
71 72 73 74 75
77
Sector Occupancy
67 69 70
69
60
64 3%

50
45% 16% 11% 9% 16%
40
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
CY'20 CY'20 CY'21 CY'21 CY'21 CY'21 CY'22 CY'22 CY'22 CY'22 CY'23 IT /ITeS BFSI

Co- Wor king Com mercial &

Pr ofess ional Serv ices
Note Indust rials Other s
* Passing Rent = Wt. Avg. rent paid by all active tenants as of that date in the region
^ Market Rent = Wt. Avg. rent paid by tenants for all leases signed in that quarter

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q1 CY’23 9
 Manoj Gaur Boman Irani Shekhar G Patel Mr. G Ram Reddy
Chairman President President-Elect Secretary

Deepak Goradia Anand Singhania Nandu Belani Sunil Furde Swaminathan Sridharan Shobhit Mohan Das
Vice President (West) Vice President (Central) Vice President (East) Vice President (Special) Vice President (South) Vice President (North)

Statistics and Research Committee

Dr. Adv. Harshul Savla Dharmendra Karia Joydeep Ponugoti

Chairman Co-Chairman Co-Chairman

PR and Media Committee

Raajesh Prajapati Deepak Kapoor Amit Raja

Chairman Co-Chairman Co- Chairman

CREDAI National & CRE Matrix | Quarterly Report | India Office | Q1 CY’23
Authors

Upasana Garg
Senior Analyst
[email protected]

Pranav Bhalla
Head – Research & Consulting
[email protected]

Abhishek Tiwari
Co-founder
[email protected]

Abhishek Kiran Gupta

CEO & Co-founder
[email protected]

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