4 cities' 2021 office rental fell by 6% in Oct-Dec quarter

New Delhi: As the demand for office spaces fell due to the covid-19 pandemic, the average office rental dropped by per cent in the October-December quarter than in 2021, in Mumbai, Chennai, Hyderabad and Kolkata. But rates stood constant in Delhi-NCR and Pune, PTI reported, citing the Vestian.

Vestian, in its quarterly newsletter The Connect Q4 2021, said that rental rose 1 per cent in Bengaluru thanks to the city's IT companies.

However, there are no significant changes in all the seven cities during the October-December period compared to the quarter before.

The data shows that the average rental value fell to Rs 45 per sq ft a month during the October-December period, while it dropped 4 per cent in Mumbai to Rs 120 per sq ft a month.

Chennai saw a 3 per cent fall to Rs 57 per sq ft and Hyderbad 2 per cent to Rs 61 per sq ft. In Pune, it stood still at Rs 70 and Delhi-NCR Rs 65 sq ft.

Though the first quarter saw a slow office space market with the advent of the second wave, the quarters after that saw better thanks to pent-up demand and strategic growth plan of large corporates, Vestian report said.

But the Omicron taking a seat in the last quarter declined market.

But the report states that gross office space absorption across the seven cities grew 8 per cent in 2021. New office supply went up 20 per cent to 39.5 million sq ft. The major share of fresh absorption is by Bangalore, followed by NCR and Hyderabad, by 28 per cent, 18.4 per cent and 17.6 per cent, respectively.

Though the IT/ITeS sector continued to be at the top in absorbing office spaces, this year, it saw a mild decline.

Meanwhile, co-working/managed office space strengthened and constituted 15 per cent of total absorption.