Office market buoyant, 250 lakh sq ft premium workspaces under-construction: Anarock

With rising demand of premium workspaces, real estate consultant Anarock has said that realty firms are currently developing around 250 lakh square feet of office space across major cities for catering to the requirements of domestic and foreign companies.

Homegrown Anarock entered into office leasing segment in April this year, expanding its business from housing brokerage, capital market transactions, and leasing of retail as well as industrial & warehousing spaces, among others.

In an interview with PTI, Peush Jain, Managing Director, Commercial Leasing and Advisory, Anarock, highlighted that the year 2024 has been extremely good for Indian office market with record gross leasing activities and drop in vacancy rates.

He expressed confidence that the demand momentum would continue next year.

''The office market has shown strong recovery and consolidation post-pandemic,'' said Jain, who has more than 20 years of experience in the real estate sector.

Jain noted that Global Capability Centres (GCCs) are being established in India by multi-national corporations (MNCs), creating huge demand for office space in key office markets -- Bengaluru, Delhi-NCR, Mumbai, Pune, Hyderabad, Chennai, Ahmedabad and Kolkata.

Flexible office space operators are also expanding in a big way and taking office spaces on lease from property owners to further sub-lease the workspaces to corporates, he said.

Among sectors, IT/ITeS firms, financial services providers (including banks), engineering & manufacturing companies are the major demand drivers.

On the outlook for the next year, Jain said, ''The outlook for 2025 is highly optimistic, with demand driven by a mix of consolidation, expansion, and hybrid work adoption.'' He pointed about shortage of supply of Grade A office space in Gurugram, Bengaluru and Pune but said developers are actively addressing this gap.

''Currently, 20-25 million (200-250 lakh) square feet of Grade A space is under construction across India. Developers who can deliver quality spaces on time will be best positioned to capitalise on the growing demand,'' Jain said.

Asked whether demand from would sustain, he said, ''Absolutely. The demand from GCCs is expected to remain strong. India's cost-effectiveness, skilled workforce, and operational efficiency make it a preferred destination for GCCs across industries like BFSI, healthcare, technology, and R&D, he said.

On challenges before the office market, Jain said the key challenges for the office market include construction delays due to higher raw material costs and supply chain disruptions.

''Occupiers are seeking shorter lease durations, impacting long-term commitments,'' he said.

Homegrown Anarock was established by Anuj Puri in April 2017 after serving as country head for 10 years in an international property consultancy firm.

Last month, Puri said that Anarock Group is targeting over 40 per cent increase in revenue this fiscal year to Rs 800 crore, mainly on the back of strong housing demand.

Mumbai-headquartered Anarock had posted a 36 per cent increase in revenue to Rs 566 crore in the last fiscal year.

During the current 2024-25 fiscal, Puri said about Rs 575 crore will come from housing brokerage services.

The remaining revenue will come from land deals, capital market transactions, strategic consulting and project management besides leasing activities in office, retail, data centre, and warehousing segments.

Anarock Group also provides consultancy in hospitality segment through 'HVS-Anarock'.

It runs society management brand ANACITY and also a marketplace for co-working seats.

Earlier this year, Anarock raised Rs 200 crore from 360 One Asset Management Ltd to fund its overall business growth and industry-defining proptech platform.

Anarock Group currently has more than 2,200 employees operating across key tier-1 and 2 markets in India and the Middle East.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)