Office space leasing across India’s top seven cities reached 53.43 million square feet between January and September 2024, according to a report by real estate firm JLL.
As published by the Hindustan Times, the total gross leasing activity for the year is projected to hit 70 million square feet, surpassing last year’s total.
In the July-September quarter, gross leasing activity reached 19.89 million square feet, marking the second-highest quarterly leasing volume on record, according to the report. Gross leasing refers to all lease agreements recorded during the period, including confirmed pre-commitments, but excluding term renewals and deals still under discussion.
Net absorption, which reflects the new floor space occupied minus the space vacated, reached 12.16 million square feet in the third quarter, a 14.9% increase year-on-year. Among cities, Bengaluru led with 34.1% of net absorption, followed by Delhi-NCR (15.8%), Mumbai (15.2%), and Pune (14.8%).
For the first nine months of 2024, net absorption was 31.03 million square feet, up by 19% compared to the same period in 2023. The office market’s growth momentum was largely driven by expansions in Global Capability Centers (GCCs) and new market entrants, particularly in tech cities.
India’s role as a global office hub continues, with both existing GCCs expanding and new players establishing a presence. Flex office spaces have also emerged as key contributors to leasing activity. In the third quarter of 2024, flex spaces accounted for 22% of total leasing, making it the largest occupier category. The tech sector followed with a 17.9% share, while banking, financial services, and insurance (BFSI) held 16.5%, and manufacturing/engineering 13.8%.
For the entire January-September period, tech firms led with a 24.4% share of total leasing, followed by flex spaces (19.2%), BFSI (17.8%), and manufacturing/engineering (16.8%).
Bengaluru remained the top city for office leasing in Q3 2024, with a 24.6% share of total activity. Delhi-NCR followed closely with 23.1%. Both cities have alternated in the top two positions, but remain dominant in terms of office occupier activity.
Mumbai and Hyderabad also showed strong performance in the third quarter, with shares of 15.6% and 14.9% respectively. Together, these two cities accounted for around half of India’s gross leasing activity in the first nine months of the year. Despite some fluctuations, the January-September 2024 period was the highest ever for all cities except Chennai and Hyderabad. Chennai’s numbers were only 6.1% below last year’s record, while Hyderabad’s figures were second only to 2019.
Global companies continued to drive demand for office space, with a 56.8% share of gross leasing volumes in the third quarter. Cumulatively, from January to September, global occupiers accounted for 55.5% of total leasing.
Domestic occupiers, though, have been steadily increasing their presence, now holding a 44.5% share for the same period. Since the COVID-19 pandemic, domestic firms’ share in leasing has grown, rising to 48% between 2022 and 2024, compared to just 35% during the 2017-2019 period.
The office market’s growth is expected to continue, with particular focus on tech-driven cities and multi-sector regions. The expansion of GCCs, supported by policies such as Karnataka’s new GCC Policy, is likely to fuel further demand. This policy offers incentives aimed at encouraging more companies to establish or expand their operations in the state, capitalizing on India’s skilled talent pool.
In conclusion, India’s office leasing market is positioned for robust growth, driven by strong demand from both global and domestic occupiers, alongside the rise of flex spaces. As existing companies expand and new entrants establish their presence, the market is expected to maintain momentum for the foreseeable future.