Office Space Leasing Declines 6% in Q3 Across Major Indian Cities
Office space leasing in India’s top eight cities saw a 6% year-on-year decline in the July-September quarter, totaling 17.8 million square feet. Despite this, the year-to-date leasing grew by 24%, and Knight Frank projects a record annual leasing of about 85 million sq ft.
Office LeasingReal EstateIndian CitiesGcc LeasingMarket TrendsReal Estate NewsOct 07, 2025
Total office space leased in Q3 2023 amounted to 17.8 million square feet, marking a 6% decrease compared to the same period last year. GCC leasing by foreign firms dropped 20% to 5.7 million sq ft from 7.1 million sq ft. Despite the quarterly dip, the overall leasing activity for the first nine months of the year shows a positive trend, with January-September gross leasing growing 24% to 66.7 million sq ft.
Knight Frank projects a record annual leasing of approximately 85 million sq ft for the full year, indicating long-term optimism in the market.
The report reveals significant variations across major cities:
- Bengaluru: 4.20 million sq ft, -21% YoY
- Mumbai: 1.90 million sq ft, -27% YoY
- Delhi-NCR: 2.70 million sq ft, -15% YoY
- Kolkata: 0.50 million sq ft, +190% YoY
- Hyderabad: 2.90 million sq ft, +33% YoY
- Chennai: 2.80 million sq ft, +9% YoY
While traditionally strong markets like Bengaluru, Mumbai, and Delhi-NCR faced declines, emerging markets such as Kolkata, Hyderabad, and Chennai showed remarkable growth.
The consultant noted a declining trend across quarters in 2023:
- Q1 (Jan-Mar): 28.20 million sq ft
- Q2 (Apr-Jun): 20.70 million sq ft
- Q3 (Jul-Sep): 17.80 million sq ft
This sequential decline suggests a cooling in the office leasing market as the year progresses.
The mixed performance across cities reflects the evolving nature of India's commercial real estate sector. While established tech hubs face headwinds, emerging cities are gaining traction, possibly due to cost advantages and improving infrastructure.
The decline in GCC leasing by foreign firms could be attributed to global economic uncertainties and changing work models. However, the strong year-to-date performance and optimistic full-year forecast indicate underlying resilience in the Indian office market.
For investors and stakeholders in the real estate sector, these trends underscore the importance of diversification across cities and the need to monitor shifting corporate strategies in office space utilization.
As the market continues to evolve, factors such as the rise of remote work, the demand for flexible office spaces, and the growth of tier-2 cities could play crucial roles in shaping the future of office leasing in India.
Frequently Asked Questions
What is the overall trend in office leasing in India for Q3 2023?
Office space leasing in India's top eight cities declined by 6% year-on-year in Q3 2023, totaling 17.8 million square feet.
How did GCC leasing by foreign firms perform in Q3 2023?
GCC leasing by foreign firms dropped 20% to 5.7 million sq ft in Q3 2023, from 7.1 million sq ft in the same period last year.
Which cities showed growth in office leasing in Q3 2023?
Kolkata, Hyderabad, and Chennai showed remarkable growth in office leasing in Q3 2023, with Kolkata growing by 190%, Hyderabad by 33%, and Chennai by 9%.
What is the projected annual leasing for the full year 2023?
Knight Frank projects a record annual leasing of approximately 85 million sq ft for the full year 2023.
What factors are influencing the decline in office leasing?
The decline in office leasing is influenced by global economic uncertainties, changing work models, and the rise of remote work, leading to reduced demand for traditional office spaces.
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