Coworking share in office space absorption up eight percentage points in FY22: Anarock

The share of coworking in office space absorption across top seven cities has gone from five percent in 2020-21 to 13 percent the next year, a growth of eight percentage points which is the highest among all office segments.

The format has become the most preferred option under the hybrid work model, compared to changing office layouts or the hub-and-spoke model, following three waves of the pandemic, an analysis by Anarock has shown.

Large deals (more than 0.1 million square feet) accounted for nearly 50 percent of overall office transaction activity across the top seven cities in FY22 compared to 47 percent a year ago. Mid-sized occupiers also witnessed a rise of one percent in total office leases in FY22, and smaller deals saw a dip of four percent, the study said.

As for completions, the top seven cities witnessed robust new office supply in FY22 at 51.2 mn sq ft, up 27 percent from a year ago. Southern cities of Bengaluru, Hyderabad and Chennai dominated new completions with a total of 58 percent share (approximately 29.85 mn sq ft).

The average office rentals stood at Rs 76 per sq ft per month across the top seven cities. Mumbai Metropolitan Region (MMR) continued to be the most expensive office market with Rs 126 per sq ft per month rentals, followed by Bengaluru and NCR at Rs 78 per sq ft per month each.

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Given the high new completions, the average vacancy levels across the top seven cities rose from 15 percent in FY21 to 16 percent in FY22. At 28.5 percent, NCR has the highest office space vacancy amongst the top seven cities followed by Kolkata and MMR at 23.5 and 15.75 percent respectively. Pune is the only city where office space vacancy rate is hovering in single digit at 8.5 percent, the analysis said.