India's Office Leasing Market Sees 31% Annual Growth in Q3 2024
Bengaluru and Hyderabad drive demand, with Pune recording 2.6 times the space take-up compared to Q3 2023.
Office LeasingIndiaBengaluruHyderabadPuneCommercial Real EstateReal Estate PuneSep 26, 2024
Bengaluru and Hyderabad accounted for over half of the leasing activity during this period, with Bengaluru registering its highest ever leasing in any quarter at 6.3 million square feet. Pune, with 2.6 million square feet of leasing activity, recorded 2.6 times the space take-up compared to Q3 2023.
Occupier confidence is reflected in continued higher uptake of large-sized deals of more than 1 lakh sq ft, accounting for 65% of total leasing in Q3 2024. Bengaluru saw 81% of its leasing through large-sized deals, while Pune followed closely with 71%, driven by the Tech and BFSI sectors.
Supply kept pace with demand, with 14.4 million sq ft of completions in Q3 2024, registering a 33% increase year-on-year. Bengaluru and Hyderabad together delivered 64% of the quarter’s new supply.
With demand outpacing supply, vacancy levels remained range-bound across the major markets, with overall India vacancy continuing to hover around 17% at the end of Q3 2024. Sectorally, the technology industry drove around one-fourth of the overall office space demand during the quarter, followed by BFSI occupiers and flex space operators.
Interestingly, Bengaluru and Pune surpassed Mumbai in BFSI leasing, and accounted for a 39% and 25% share respectively in overall BFSI leasing during the quarter.
The flexible office space segment recorded a new quarterly high of 3.4 million square feet in space take-up during Q3 2024, surpassing the previous high of 2.6 million square feet. Select micro markets accounted for about 54% of the leasing by flex space operators in Q3 2024.
Notably, nearly half of the leasing by flex space operators was driven by large-sized deals exceeding 1 lakh sq ft, indicating a growing demand from large enterprises gaining scale. Overall, 2024 has already seen flex space leasing to the tune of 7.9 million square feet so far, marking a 20% year-on-year increase.
Frequently Asked Questions
What was the year-on-year growth in office leasing in Q3 2024?
31%
Which cities drove the demand for office leasing in Q3 2024?
Bengaluru and Hyderabad
What was the total office leasing activity in Q3 2024?
17.3 million square feet
Which sector drove the most office space demand in Q3 2024?
Technology industry
What was the growth in flex space leasing in 2024 compared to the previous year?
20%
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