According to a PropWquity study, the supply of commercial real estate in India’s major Tier-1 cities increased by 7% in the third quarter of 2023 to an overall total of 14.61 million square feet. The government’s proactive efforts to support the IT industry through infrastructure improvements and tax breaks are responsible for this growth. With about 35% of the new supply, Hyderabad was the best performer overall. Bengaluru came in second with 25% of the new supply. A notable 20% increase in net occupancy occurred during the same period, going from 10.30 million square feet (in Msft) in Q2 CY’23 to 12.31 million square feet (in Msft) in Q3 CY’23. In contrast, gross occupancy increased by a meager 2% from Q3 2023 to Q2 2023. This significant increase in occupancy is evidence of the market’s dynamism and the high demand for commercial real estate at the time. 

Companies and businesses have been growing their operations, demonstrating the industry’s dynamism and room for growth. With a 9% YoY increase in new supply, MMR has the highest net occupancy among the Tier 1 cities. In contrast, because of the excess supply from prior quarters and high rental prices in this one, the Delhi-NCR area has seen a significant decline in the construction of new properties, with a 65% decrease compared to the previous year. As a result, Delhi NCR now only makes up 7% of the supply of new real estate in Tier-1 cities. The higher net occupancy in this quarter is the main reason for the sharp increase in rental rates in Delhi-NCR, which have increased YoY by 17% and QoQ by 45%. Due mainly to leasing initiatives by Citi Bank and Teleperformance, Gurugram’s Sector-18 and Noida Expressway rank among the top micro-markets in the Delhi NCR according to occupancy levels. 

India’s market for commercial real estate is expanding rapidly, providing companies with dynamic spaces that adapt to their changing needs. The supply of commercial real estate has increased by 7% in tier-1 cities, suggesting a bright future for the industry. We can not wait to take part in this thrilling adventure. With the festive season approaching, strong demographics, a boost in business confidence, and government initiatives in high-value industries like infrastructure and manufacturing, the current wave in Indian commercial real estate is predicted to continue for the upcoming quarter. 

There was a small shift in the number of open positions from Q2 2023 to Q3 2024 in the Top Tier-1 cities of India. There are 152.32 million square feet of vacant space overall in these cities as of Q3 2023. The most unsold stock is found in Hyderabad and Bengaluru, at 43%, and MMR, at 15%. This pattern illustrates how the Indian real estate market has changed over time, driven by several variables, including the current state of the economy, the dynamic interplay between supply and demand, and the changing needs of businesses. The commercial real estate market is formed by these factors taken together. Although the marginal increase in vacancy levels is promising, major players in the industry must stay vigilant and flexible to adeptly navigate the continually shifting landscape of the commercial real estate sector.