Outlook 2023 India






 New supply of 1.85 msf

 Net absorption has rebounded from the lows witnessed in 2021. It is expected to reach around 0.8 msf in 2022 and breach the 1 msf mark in the subsequent year with the ongoing recovery gaining momentum.  Vacancy is expected to decline to around 26% by 2024 from 28% as of 2022 and then decline further by 2026 with the IT-BPM sector remaining a key driver of tenant demand.  The market is tenant favourable and is likely to remain so in 2023 before moving gradually into neutral territory beyond 2024.

 Rents are forecast to grow by less than 1% in both 2022 and 2023 before accelerating in the subsequent years; however, rental growth will remain in the 1-2% range over 2024-2026 as rising tenant demand is offset by significant new supply.  This movement will take rents to INR 574/sft/yr at the end of 2022 to INR 579/sft/yr at the end of 2023 and subsequently to INR 600/sft/yr by 2026.

 Flight to quality is a key trend witnessed in the Kolkata market. Most of the Grade A, under-construction projects, especially in the prime office corridors Salt Lake Sector V and Rajarhat, are incorporating modern amenities, technology solutions and sustainability features, which are in demand from prominent occupiers. .

expected to enter Kolkata in 2023 across Salt Lake Sector V, Rajarhat and Park Circus Connector micro-markets.  Over 2 msf of new supply is expected in 2025 including expansion of a property owned by Brookfield India REIT.

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