India's Office Leasing Boom: Projected Record in 2024

India's office leasing market is set to reach nearly 70 million sq. ft. in 2024, driven by Global Capability Centres (GCCs). Tech companies lead with 23% absorption. Bengaluru dominates, while domestic firms drive growth. The sector benefits from India's resilient economy and streamlined policies.

India's office leasing market is on the brink of a record-setting year, projected to achieve nearly 70 million square feet of space in 2024, buoyed by the expansion of Global Capability Centres (GCCs). According to CBRE, GCCs are poised to dominate the scene, accounting for 35-40% of the total office leasing activity in the country's top nine cities.

Bengaluru remains at the forefront of office space absorption, capturing 30% of the total leasing from January to September 2024. Delhi-NCR and Hyderabad followed closely, each with 14%, while Chennai secured 13%, and Mumbai and Pune contributed 12% each. Notably, Bengaluru, Hyderabad, and Pune also led in new supply, collectively accounting for 63% of additional office space during this period.

The last peak in office leasing was seen in 2019 with 66.6 million sq. ft. The resurgent demand among both global and domestic occupiers is expected to exceed this level by 2024. From January to September 2024, India witnessed 53.8 million sq. ft. of gross absorption in the office sector across major cities, indicating a 19% year-on-year growth and the most active leasing period ever recorded. During this span, new office supply totaled 37.5 million sq. ft.

Technology companies spearheaded the leasing landscape, accounting for 23% of the total office space absorption. They were followed by flexible space operators at 19% and BFSI firms at 16%. Also in the mix were engineering and manufacturing firms with a 9% share, while life sciences, and research, consulting, and analytics each held 7%.

Leading office absorption, domestic firms claimed a 42% share, driven primarily by flexible space operators, technology companies, and BFSI firms. Between July and September 2024, office leasing reached a quarterly record of 19 million sq. ft., led predominantly by Bengaluru, Mumbai, and Hyderabad, which accounted for nearly two-thirds of total leasing.

Technology continued its stronghold with a 19% share, trailed by BFSI firms at 18%, flexible space operators at 17%, and engineering and manufacturing firms capturing 9%. Anshuman Magazine, Chairman & CEO of CBRE for India, South-East Asia, Middle East & Africa, emphasized the potential of Indian talent attracting diverse industries to establish GCC operations.

Magazine noted, "India's economic resilience amidst global uncertainties is increasingly attracting businesses seeking investment opportunities. The country's streamlined regulations and efficient approval mechanisms continue to foster a favorable business climate." Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE India, remarked on the vibrant office market, emphasizing its significant expansion driven by new and scaling firms in sectors such as life sciences, automotive, and aerospace looking to enhance their GCC presence in India.

(With inputs from agencies.)