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Commercial Real Estate Supply Up 7% in Tier-1 Cities:  PropEquity Study

New Delhi, October 31, 2023: PropEquity, India’s leading real estate data, research and analytics firm, indicates a significant 7% increase in ready supply during the third quarter of 2023 when compared to the preceding quarter, Q2 CY’23. 

During the same period, there was a 20% surge in net occupancy, representing an increase from 10.30 million square feet (in Msft) in the previous quarter, Q2 CY’23, to 12.31 million square feet (in Msft) in Q3 CY’23. On the other hand gross occupancy slightly increased by 2% during the third quarter of 2023 when compared to the preceding quarter, Q2 2023.

This substantial growth in occupancy is a testament to the dynamic nature of the market and the heightened demand for commercial real estate during that period. It suggests that businesses and enterprises have been actively expanding their presence and operations, underscoring the vibrancy of the sector and its potential for continued development in the near future.

Key Market Indicators (in Msft) in Q3 CY’23
Tier-1 CitiesQ3-2022Q2-2023Q3-2023Q-o-QY-o-Y
New Supply14.3913.6014.617%2%
Net Occupancy17.4210.3012.3120%-29%
Gross Occupancy26.1417.4217.832%-32%
Vacant Stock149.81150.01152.312%2%
Samir Jasuja

“India’s commercial real estate has bucked the downtrend which is witnessed in top global cities. The reason why India has not got affected is due to the increase in demand of global captive centers (GCCs) in India, which is because of several factors such as availability of good quality workforce at lower costs, lower real estate costs and favorable exchange rates among other factors,” said Samir Jasuja, Founder & CEO of PropEquity.

“In the realm of India’s commercial real estate, this expansion sparks the vital connection between businesses and dynamic commercial spaces tailored to their ever-changing demands. Tier-1 Cities in India witnessed a 7% surge in commercial real estate supply, and with this surge, we witness a promising horizon for India’s commercial real estate market, and we’re thrilled to play a role in this exhilarating journey. The current wave in Indian commercial real estate is set to ride high for the next quarter, fueled by the forthcoming festive season and bolstered by demographic strengths, enhanced business sentiment, and government-driven initiatives in high-value sectors like manufacturing and infrastructure,” said Garvit Tiwari, Director & Co-Founder, InfraMantra.

The vacancy rates in the top Tier-1 cities of India have remained relatively stable. The latest figures indicate a marginal 2% increase vacancy levels compared to Q2 2023. The total vacant stock in Q3 2023 amounts to 152.32 Mnsft across these cities, out of which the largest share was of Hyderabad and Bengaluru about 43%, followed by MMR with 15%.