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Office leasing in Pune recovering and inching towards 5.5 million sq feet in 2022

1536 Office leasing in Pune

Office space leasing jumped five-fold to 3.5 mn sq feet YoY in H1 2022

 

Pune,  16th September 2022 – Grade A office absorption in Pune is expected to touch 5.5 million sq ft during 2022, a likely 53% increase from last year when demand was marred by the lockdowns. Occupier confidence is back in the market, with demand backed by Flex, Consulting and Tech occupiers.

During H1 2022, office absorption already crossed 3.5 mn sq feet, a five-fold rise from the same period last year. The H1 2022 demand has already surpassed H1 2019 demand by 120%. Year 2019 saw the highest ever annual office space absorption.

Leasing trends (mn sq feet)

Year

2019

2020

2021

H1 2022

Leasing

(mn sq feet)

5.7

2.8

3.6

3.5

Source: Colliers

Note: Data pertains to Grade A buildings

With reducing occupier exits and a surge in demand, occupancy levels in the city are improving. After a gap of two years, overall vacancy levels dipped by 50 basis points on a QoQ basis. Average rents in Pune also saw a marginal increase of 1.5% during Q2 2022. The next couple of quarters are likely to drive rental growth further, as demand is likely to remain robust.

Trends in Grade A vacancy

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

Q1 2022

Q2 2022

Vacancy Rate - Pune

6.7%

6.8%

7.6%

9.6%

10.5%

12.1%

14.9%

15.2%

15.5%

15.0%

Source: Colliers

“Leasing momentum is strengthening every quarter and occupier enquiries remain upbeat. This suggests that offices will continue to take center stage in the working ecosystem and are already witnessing growth. Pune remains a promising location for corporate and India due to its infrastructure advancements, employment opportunities, a significant proportion of the millennial workforce, and attractive real estate pricing. During H1 2022, leasing by flex operators in Pune totaled 1.2 mn sq feet, the highest seen across the top six cities.  Large occupiers are also turning towards flex as a part of their hybrid working policy, providing flexibility to their employees. A healthy supply pipeline of about 25 mn sq feet in next 3 years will offer a variety of options to occupiers across multiple micro-markets.”

 

 

said Animesh Tripathi, Managing Director, Pune, Colliers.

 

 

Flex space leading the growth in a hybrid world

Flex space contributed to 34% of the total leasing in Pune, outpacing Technology sector which accounted for a 15% share in total leasing. Flex spaces in Pune are seeing renewed demand with many large enterprises incorporating a flex space component in their portfolio. Various flex space operators expanded their footprints in the city during H1 2022 through select large deals (>1,00,000 sq feet) in good-quality Grade A buildings. About 80% of the total flex leasing was through large deals signaling occupiers’ strong preference for utilizing flex spaces. Baner and Off-CBD east (Kalyani Nagar, Koregaon Park, Viman Nagar) are the thriving flex micro-markets which witnessed maximum leasing activity due to their robust social and physical infrastructure, and proximity to key residential locations. In the coming quarters as well, demand for flex space will continue to be robust, as large occupiers continue to pivot towards flex spaces to embrace hybrid work.

 

 

 

Flex leasing trends

Year

2019

2020

2021

H1 2022

Flex leasing (mn sq feet)

0.7

0.3

0.8

1.2

Flex share in total leasing (%)

12%

8%

23%

34%

Source: Colliers

Note: Data pertains to Grade A buildings

 

“This is a critical time for occupiers to make strategic decisions about their workplace strategies. Flex space is no longer a stop-gap arrangement for occupiers but is a permanent part of their office portfolio. As a thriving location for IT companies, startups and entrepreneurs, Pune will continue to receive huge demand for flex spaces in the coming years.”


said Vimal Nadar, Senior Director and Head of Research, Colliers India.


Media Contact:        

Sukanya Dasgupta

Senior Director & Head, Marketing & Communications | Colliers India

sukanya.dasgupta@colliers.com |+91 9811867682

 

Riddhi Vira

Manager, Public Relations | Colliers India

riddhi.vira@colliers.com | +91 9619776362

 

About Colliers

Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 63 countries, our 17,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 27 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of 20% for shareholders. With annual revenues of $4.5 billion and $81 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors and our people. 


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Animesh Tripathi

Managing Director | Pune

Pune

Animesh works as the Managing Director & Head of office services business for Colliers in Pune and is responsible for leading the office consulting business in Pune.

His current responsibilities include, providing end-to-end real estate solutions to corporate clients. His position entails assessing client’s requirements, identifying solutions, negotiating financial and lease terms and providing market Intelligence along with working in a lead role to service the real estate requirements of key clients. His role also includes participation in large business pitches including business development. He understands the international standards followed by global clients in his experience to service clients. He has also been exposed to the local market and has proved competent in successfully winning local businesses .

Animesh has lead and successfully transacted over 5 million sq. ft. of prime office space for corporate occupiers across various asset classes and has structured various transactions for lease acquisitions, renegotiations, asset dispositions, sub-leasing etc. Prior to joining Colliers International, Animesh has a work experience of over 10 years working with Jones Lang LaSalle, NAI Global and Vulcan Group. Animesh has diverse experience in the real estate field with key focus on commercial markets and has also been involved in industrial and investment transactions in Pune.

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Vimal Nadar

Senior Director

Research

Mumbai (Corporate Office)

Vimal has a cumulative of about 14 years post qualification (as a Chartered Accountant) experience and recently joined Colliers as the Head of Research. He is responsible for leading and managing India Research operations. He will focus on thought leadership though timely and insightful content to support business growth while elevating the brand  value of the company. Prior to this, he led research thought leadership at JLL and Cushman & Wakefield. He began his professional career with Crisil; business research and consulting being his core areas of work. His areas of expertise include business assessment, demand-supply analysis, market entry strategy, strategic road mapping, etc in sectors such as Real estate, Cement, BFSI and other sub-sectors within the infrastructure domain. 

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