Hyderabad, which topped in office space absorption and new supply in the third quarter of 2021 (July-September), is expected to witness a fresh supply during Q4 2021 (October-December) up to 4.6 million sq ft taking the total supply for the year 2021 to about 9.7 million sq ft. Of the fresh supply, 51% will come in the IT SEZ segment, 35% in the IT-BPM and 14% in the commercial segment, as per Colliers. Between January and September 2021, the essential demand drivers in the city have been BFSI accounting for 31%, flexible space 28%, IT-BPM approximately 30% and engineering, production, healthcare, and pharmaceutical estimated for the remaining 11%. Colliers sees that the developers are going slower with new supply as demand gets momentum. And office rentals are expected to remain stable in Q4 2021 and may increase slowly from 2022. Ramesh Nair, CEO, India & MD, Market Development, Asia at Colliers, told the media that the Hyderabad office market’s long-term market fundamentals remain unchanged. The market witnessed some large contracts during Q3 2021, lending confidence to developers and occupiers. During Q3 2021, gross absorption surged over three-fold quarter-on-quarter. For the first time during a quarter, Hyderabad had the maximum leasing volume at 2.5 million sq ft exceeding Bengaluru, as occupiers concentrated on large block agreements and even leasing whole buildings. In Q3 2021, the city accounted for 24.2% of the entire absorption of 10.3 million sq ft space across the leading six cities of India while it added to 29.6% of the new supply of 10.8 million sq ft. Hyderabad exceeded Delhi-NCR, Bengaluru, Pune, Mumbai and Chennai in both, gross office absorption and new supply during the Q3 of 2021. Hyderabad's office space development momentum continues owing to its strong fundamentals taking the overall stock to 74.5 million sq ft out of 566.6 million sq ft stock across top cities of India (accounting for 13.1 per cent). Leasing growth was led by select large agreements. Hyderabad observed a 33.6% year-on-year increase in gross absorption in Q3 2021 to 2.5 million sq ft, taking the entire absorption from January 2021 up to September 2021 to 3.7 million sq ft, estimating 18% of India’s 20.4 million sq ft absorption. Image Source Also read: IBM signs lease agreement for 5 lakh sq ft office space in Bengaluru