India's Office Space Leasing Market Hits Record High in 2024
India's position as the office-to-the-world remains intact as global occupiers continue to drive their real estate expansion here. In Q3, they remained active with a 56.8 per cent share of gross leasing volumes.
Office Space LeasingIndiaReal EstateGccsFlexReal Estate MumbaiOct 02, 2024
The third quarter (Q3) saw gross leasing activity of 19.89 msqft, up 8.2 per cent on-quarter, making it the second-best quarter ever. The best quarter ever for the market was December 2023.
The demand from the flexible workspace segment and Global Capability Centres (GCCs) has driven the robust growth in the market. Flex has become the highest contributor to quarterly gross leasing for the first time, with a 22 per cent share. GCCs remain the dominant occupier group, driving 36.2 per cent of all leasing activity.
Global occupiers continue to drive the market with a 56.8 per cent share. Bengaluru continues to lead with a 24.6 per cent share of leasing, followed by Delhi NCR with 23.1 per cent. Mumbai and Hyderabad had 15.6 per cent and 14.9 per cent respectively.
The leading cities in the nine-month period are Bengaluru, Delhi NCR, and Mumbai with a combined share of 63.6 per cent. India's position as the office-to-the-world remains intact as global occupiers continue to drive their real estate expansion here.
In Q3, they remained active with a 56.8 per cent share of gross leasing volumes. On a cumulative basis so far this year, GCCs account for a 55.5 per cent share, with domestic occupiers accounting for 44.5 per cent.
The domestic office market has seen flex emerge as a powerhouse occupier segment. Flex operators have claimed an unprecedented 22 per cent of Q3 leasing activity, surpassing traditional frontrunners like tech and BFSI.
With a record-breaking 4.38 msqft leased in Q3 alone and 10.23 msqft in the first nine months, the flex segment is on track to better its previous annual record of 10.4 msqft in 2019.
Net absorption in the top seven cities stood at 12.16 msqft, up by a healthy 14.9 per cent on-quarter, led by Bengaluru at 34.1 per cent share of net absorption, Delhi NCR, Mumbai, and Pune with near similar shares of 15.8, 15.2, and 14.8 per cent, respectively.
The growth momentum is expected to pivot around expansion by existing GCCs and new players entering the country. Activity will remain centred around the core tech cities and other multi-sectoral ones based on the maturity levels of GCCs and their existing footprints.
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Frequently Asked Questions
What is the current state of the office space leasing market in India?
The office space leasing market in India has reached a record high in 2024, with gross leasing activity touching 53.43 million square feet (msqft) in the first nine months of the year.
What is driving the growth in the office space leasing market?
The demand from the flexible workspace segment and Global Capability Centres (GCCs) is driving the robust growth in the market.
Which cities are leading the office space leasing market in India?
Bengaluru, Delhi NCR, and Mumbai are the leading cities in the nine-month period, with a combined share of 63.6 per cent.
What is the outlook for the office space leasing market in India?
The growth momentum is expected to pivot around expansion by existing GCCs and new players entering the country.
Who is the leading occupier group in the office space leasing market?
GCCs remain the dominant occupier group, driving 36.2 per cent of all leasing activity.
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