HYDERABAD: With increased new office completions, Hyderabad witnessed a rise in office vacancy levels at 3.9 per cent in the first half (H1) in FY22 when compared to the same period in FY21.According to Anarock Property Consultants, Hyderabad has the highest vacancy levels at 15.20 per cent in H1 FY22 as against 11.30 per cent a year ago. As much as 4.5 million sqft of new office space was added in the city in H1 FY22.
Among others, Bengaluru witnessed maximum new office completions in the period, approximately 7.3 mn sqft, while Chennai registered new office addition of 1.15 mn sqft area in the first two quarters of the present fiscal year.
Prashant Thakur, Director & Head (Research), Anarock Group, said that rising vacancies in the southern metropolitan cities can largely be attributed to increased new office space additions in the period. The three cities saw new office space addition of 12.95 mn sqft area in H1 FY22, accounting for nearly 58 per cent share of the total new completions in top seven cities.
This apart, the average office rentals in Hyderabad have slightly increased from Rs 56.5 per sqft in H1 FY21 to Rs 58 per sqft in H1 FY22. However, the office rentals in the city remain lowest among the top seven cities in the country, while the Mumbai Metropolitan Region’s was the highest at Rs 125 per sqft, the report added.
“Average monthly rentals in the top seven cities have remained steady at approximately Rs 75 per sqft in H1 FY22 against the corresponding period in preceding fiscal year. Interestingly, IT/ ITeS hubs like Bengaluru, Hyderabad and Pune saw a marginal rise of three per cent each in the average monthly office rentals in H1 FY22,” the report said.
Rise of co-working spaces
In another notable trend, the demand for co-working spaces is on the rise. Experts say Covid-19 has redefined the need for office spaces and businesses are heavily focused on cost optimisation to tackle unprecedented crises in the future.
The share of co-working spaces rose to eight per cent. The cost advantage of co-working spaces clearly outstrips the possible risk factors. The pandemic has been a growth catalyst for the co-working sector, and this growth is likely to grow over the next two to three years.