New Delhi [India], November 23 (ANI): In the Indian office space market, Ahmedabad grew the highest at 117 per cent in terms of year-on-year (YoY) growth in transaction volumes during the third quarter of the calendar year 2022 (Q3 2022), according to a report compiled by Frank Knight Research.

According to the report, the 1.24 million sq m (16.1 m sq ft) transacted during Q3 2022 represents a healthy 29 per cent YoY growth. Notably, all markets, besides Pune and Hyderabad, have seen a YoY growth in transaction volumes with Ahmedabad, Mumbai and Bengaluru growing 117 per cent, 82 per cent and 71 per cent YoY respectively.

"We have been comparing quarterly transaction volumes with the quarterly average of 2019 to assess the extent of recovery that the market has reached since pre-pandemic levels. The space transacted during Q3 2022 exceeded the 2019 quarterly average by 6 per cent," according to the report -- India Real Estate - Office and Residential Market.

The co-working sector continued to find the occupier's favour and constituted 23 per cent of the transacted space during the period, the study said. Co-working players were particularly active in Bengaluru as the city accounted for a substantial 52 per cent of the total space transacted by the sector.

The other services sector companies were the most active followed by those from the information technology (IT) sector accounting for 29 per cent and 23 per cent of the transacted space during Q3 2022 respectively, the report said. The IT sector's 'back to office' transition continues to be supported by the sector's leadership teams and progress, in terms of increase in actual physical occupancy, has been seen across markets. The report said it was expected that the sector's share in transactions would approach its long-term quarterly average of 35-40 per cent share, once return to office is complete.

While transaction volumes have grown, rental levels have also stabilised or grown in YoY and sequential terms across all markets, the report said, adding that Bengaluru, the largest office market in India, saw rental levels grow by 13 per cent YoY and stayed steady compared to the preceding quarter.

In line with occupier demand, office completions have also been increasing steadily over 2022 as developers have ramped up development activity cautiously, the Frank Knight Research said. As much as 1.2 million sq m (13.0 million sq ft) of office space was delivered in Q3 2022, constituting a 9 per cent growth YoY. The report said Bengaluru, with 0.5 million sq m (4.9 m sq ft), accounted for 37 per cent of the space delivered during the quarter and along with Hyderabad, represented 63 per cent of the total space delivered during the quarter.

The report said the Indian office space market volumes rallied consistently since the second wave of the pandemic in the second Q2 2021. It added barring the slight dip seen during Q1 2022 due to fears of the Omicron variant, market volumes have been on an upward trajectory that culminated in a post-pandemic high in Q3 2022. (ANI)