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‘Bengaluru Surpasses Pune In Office Market Activity In H1 FY23’

'Bengaluru pips Pune with 6.1 mn sq ft of new office completions and 6.08 mn sq ft absorption In H1 FY23'

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In overall office space activity, Bengaluru has overtaken Pune with about 6.1 million square feet of new office completions and about 6.08 million square feet absorption in the first half of financial year 2022-2033, according to a new report.

Pune registered a mere a 0.85 million square feet of new office completions and approximately 1.35 million square feet of office space absorption during the period, property consultant Anarock said in its report on Friday.

Meanwhile, Bengaluru and Pune remain the top commercial office destinations for IT-ITeS (Information Technology Enabled Services) sectors and co-working occupiers, the property consultant added.

Prashant Thakur, Senior Director of Research, Anarock Group said that office vacancy rate in Pune (at 7.8 per cent) is the lowest among all top seven cities including Bengaluru which had an office vacancy of 10/9 per cent in the first half of this financial year. “Both cities recorded similar yearly growth of 6 per cent in average monthly office rentals," Thakur said.

“With approximately 6.08 million square feet net absorption in H1 FY23, the highest recorded in the city in the last six years, Bengaluru remains the country’s most active office market,” the report added.

However, new office supply in Bengaluru saw a 16 per cent decrease compared to the past year. Bengaluru’s net office absorption rose to 6.08 million square feet in the first half of this fiscal, surpassing the absorption recorded in the same period in FY22 by 90 per cent, the report said, adding that the growth was driven by solid new corporate contracts.

During H1FY23, the average monthly office rentals in the Bengaluru stood at Rs 84 per square feet. The city’s average office rentals rose by 6 per cent over the corresponding period in the previous year.

According to the report, city-wide vacancy levels remained almost stable at 10.9 per cent in H1FY23, a marginal change of 0.1 per cent over H1FY22.

However, Pune’s average monthly office rentals in H1FY23 increased by 6 per cent to Rs 74 per square feet, while vacancy rate rose 3.3 per cent from 4.5 per cent in H1 FY22 to 7.8 per cent in H1 FY23.

In Bengaluru, the IT-IT-eS sector led office market occupancy in the first half of FY23 with 35 per cent of the leasing market share, followed by the banking, financial services, and insurance (BFSI) and co-working at 30 per cent and 18 per cent, respectively, the report said.