The Indian office space market is likely to record record high leasing of 80 million square feet (msf) across top eight cities in 2024.
According to Cushman & Wakefield’s recent office data, the first half of the year saw 41.9 msf being leased across top eight cities and another over 40 msf space leasing is expected in the second half. This would be the third consecutive year of surpassing the 70 msf milestone - a first in India’s office space leasing history.
In terms of the cities, Bengaluru, Mumbai, Hyderabad, and Kolkata recorded the highest-ever leasing figures in H1 of 2024. Bengaluru and Mumbai saw the highest growth of 132 percent and 71 percent on an on-year basis.
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Gross volume leasing in Bengaluru in H1 of 2024 stood at 12.2 msf, while it was 9.5 msf in Mumbai in the same period. Delhi NCR recorded 6.5 msf being leased out in H1, the report, released on August 28, said.
This growth is driven primarily by fresh demand from multinational corporations, the optimisation of pre-leased buildings in key cities, and a higher return to office. The market is anticipated to maintain its strong momentum throughout the year with over 40 msf expected to be leased in the second half.
Anshul Jain, chief executive for India, Southeast Asia and Asia Pacific Tenant Representation at Cushman & Wakefield, said that India’s unique combination of a skilled talent pool, a tech-friendly environment, and ongoing infrastructure development, has firmly set it as a premier destination for Global Capability Centres (GCCs).
“We are observing a surge of interest from companies across various sectors, not just technology or large corporations, eager to establish their presence in the Indian market. The positive sentiment among occupiers, particularly GCCs, coupled with a healthy pipeline of quality office supply, sets the stage for a record-breaking year. We anticipate that 2024 GLV will surpass the historic milestone of 80 million square feet, underscoring the sustained strength and potential of India's office market,” he said.
The report said that net absorption in H1 2024 also recorded a 46 percent year-on-year growth—the highest for any first half since 2020. Bengaluru had the highest share of 29 percent (6.1 msf) net absorption among all top eight cities in the first half of the year.
This positive trend reflects the confidence of occupiers, particularly from GCCs, in India’s office market, the report said.
The overall Grade A vacancy rate decreased by 40 basis points to 17.7 percent, the lowest since Q4 2021. The IT-BPM sector continued to dominate leasing activity, contributing 26 percent of the GLV in H1 2024. The BFSI sector followed as the second-largest contributor, the report said.
New supply for the first half of 2024 stood at 20.8 msf, with Hyderabad and Bengaluru together accounting for approximately 51 percent of the new supply with Hyderabad leading with a 27 percent share.
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