Office Space Leasing Surges by 31% Across Major Indian Cities

Gross leasing of office space surged by 31% in the July-September quarter across six major Indian cities, driven primarily by the technology sector. Bengaluru and Hyderabad accounted for over half of the leasing activity, with substantial increases in Pune as well. Mumbai and Chennai saw stable demand, while Delhi-NCR experienced a decline.

Demand for office space continues to be strong with gross leasing rising 31 percent in the July-September quarter across six major cities, according to Colliers India.

Data from real estate consultant Colliers India revealed that gross office leasing rose to 17.3 million square feet in July-September, up from 13.2 million square feet in the same period last year.

Bengaluru and Hyderabad accounted for over half of the leasing activity, with Bengaluru registering its highest-ever leasing of 6.3 million square feet, an 85 percent year-over-year increase.

In Pune, gross leasing grew to 2.6 million square feet from 1 million square feet. Office space leasing in Mumbai and Chennai remained flat at 1.7 million square feet and 1.4 million square feet, respectively.

Hyderabad saw a 16 percent increase in gross leasing, reaching 2.9 million square feet from 2.5 million square feet last year. However, Delhi-NCR experienced a 25 percent decline, with leasing dropping to 2.4 million square feet from 3.2 million square feet year-on-year.

Gross absorption figures exclude lease renewals, pre-commitments, and deals with only a letter of intent signed.

According to Colliers, the technology sector drove about one-fourth of the overall office space demand during the quarter, followed by BFSI occupiers and flexible space operators.

"Office demand across different markets and sectors has been impressive in the last 2-3 years, aiding overall leasing to reach new highs each passing year. Interestingly, 2024 saw consecutive quarters of high growth in demand and supply," said Arpit Mehrotra, Managing Director, Office Services, India at Colliers.

He added that office space demand in Bengaluru, Hyderabad, and Mumbai has reached or surpassed 2023 levels in the first three quarters of 2024. "Occupier confidence is reflected in continued higher uptake of large-sized deals of more than 100,000 square feet, accounting for 65 percent of total leasing in Q3 2024," Mehrotra noted.

(With inputs from agencies.)