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Banking, Financial Services And Insurance (BFSI) Firms Constituted 29% Of Total Leasing In Office Sector During Jul-Sep ’23

October 3, 2023: CBRE South Asia Pvt. Ltd, India’s leading real estate consulting firm, on Tuesday announced the findings of its latest office report, CBRE India Office Figures Q3 2023’. The report highlighted that office leasing activity across 9 cities increased by 33% Y-o-Y and touched 15.8 mn. sq. ft. during the Jul-Sep’23 period. The share of Banking, Financial Services and Insurance (BFSI) firms constituted 29% of total leasing in office sector during the quarter. Mumbai, Bangalore and Hyderabad dominated the absorption in Jul-Sep ’23 period, collectively accounting for about 60% of the transaction activity. 

The BFSI firms’ leasing share surged from 16% in the Apr-Jun’23 quarter to 29% during the Jul-Sept’23, driven by significant deal closures by global capability centres of BFSI corporates, while Indian banks and insurance firms continued to expand their footprint in the country. 

During the Jul-Sep’23 quarter, leasing activity was also driven by technology companies, comprising a 23% share, followed by engineering and manufacturing companies (10%), life sciences firms (10%), flexible space operators (8%), and research, consulting, and analytics firms (7%). American and domestic firms equally lead the absorption in Jul-Sep ‘23 period with a share of 42% each. 

In the Jul-Sep’23 period, the total office space supply across 9 cities surged to 19.3 million sq. ft., recording a 94% Y-o-Y increase. Bangalore, Hyderabad and Pune dominated new completions in Jul-Sep’23 with a share of 77%. The non-SEZ sector remained at the forefront of development completions in the quarter (Jul-Sep’23), increasing its share from 75% in the previous quarter (Apr-Jun) to 95%. According to the report, highlighting the ongoing sustainability commitment of developers, over half (53%) of the completed projects in Jul-Sep ‘23 period were green-compliant and received green certifications, such as LEED or IGBC.

Small-sized (less than 10,000 sq. ft.) to medium-sized (10,000 – 50,000 sq. ft.) transactions drove office space take-up in Jul-Sep ‘23 with a share of 86%, which was largely stable on a quarterly basis. The share of large-sized deals (more than 100,000 sq. ft.) saw a slight uptick, from 6% in the previous quarter to 7% in the Jul-Sep ‘23. Bangalore and Hyderabad took the lead in large-sized deal closures during the quarter, with Chennai and Delhi-NCR following suit. A few other such transactions were also reported in Pune and Mumbai. 


Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “India’s office sector has outperformed expectations this year with sustained absorption, driven by optimistic occupier sentiment and a surge in inquiries. While the office sector in 2023 is likely to perform better than predicted at the beginning of the year, India has demonstrated resilience in the face of global economic challenges and remains one of the most attractive destinations for global corporations establishing their global capability centres (GCCs). Simultaneously, domestic companies, particularly in sectors such as BFSI (Banking, Financial Services, and Insurance) and engineering & manufacturing, are displaying an increasing appetite for office spaces in major cities”.

“Bangalore, followed by Delhi-NCR, Chennai and Hyderabad, are expected to drive absorption in 2023, while Mumbai, Pune and Kolkata are also likely to witness steady space take-up during the year. Moreover, global and domestic technology firms and consulting companies are exploring opportunities in select tier-II markets, drawn by improved infrastructure, a skilled talent pool, and attractive rental options”.

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “This year, we observe occupiers adopting a multifaceted approach that encompasses optimum strategies. Return-to-office plans are gaining traction, characterized by a concerted effort to craft experiential workplaces that cater to all generations of employees. This year, we anticipate a surge in investments in workplace technology, improved coordination across functions, and a heightened emphasis on transforming workspaces.

The popularity of flexible office spaces continues to rise, with an increasing number of occupiers indicating their intent to allocate more than 10% of their portfolios to these solutions. Above this, sustainability has transitioned from being an option to a priority. Leading occupiers are committing to achieve net-zero emissions by 2050, consequently driving demand for green-compliant buildings. This surge in demand has prompted developers to double their green-certified supply over the past seven years”.

Outlook & Other Observations

Office sector set for a better-than-expected outlook for 2023

  • Optimistic outlook for the Indian office sector in 2023, outperforming initial predictions.
  • Sustained absorption levels observed in Q3 2023, contributing to positive sentiment.
  • Anticipated moderation in absorption for 2023 to be less pronounced than expected.
  • Tenant inquiries and tour requests are on the rise, reflecting improved occupier sentiment.
  • APAC Leasing Market Sentiment Index remained above average in September 2023.
  • Focus on achieving operational efficiencies among occupiers with a prudent expansion approach.
  • Despite global economic challenges like monetary tightening and geopolitics, India’s infrastructure spending, domestic consumption, and bank credit growth continue to support economic growth.
  • Attraction of leading corporate global capability centers (GCCs) to India.
  • Increasing appetite for office spaces in top cities from domestic companies, particularly in BFSI and engineering & manufacturing sectors.
  • Expected absorption drivers in 2023: Bangalore, Delhi-NCR, Chennai, and Hyderabad, with Mumbai, Pune, and Kolkata also witnessing steady uptake.
  • Potential expansion of global and domestic technology firms and consulting companies into select tier-II markets, benefiting from infrastructure development, skilled talent pool, and favorable rental options.

Steady supply pipeline to cater to occupiers’ need for next generation offices

  • Strong supply pipeline driven by high-quality, investment-grade offerings in prime locations.
  • Focus on “flight-to-quality” absorption as a key trend.
  • Dominance of Bangalore, Hyderabad, and Delhi-NCR in terms of completions.
  • Other markets such as Chennai, Pune, Mumbai, and Kolkata also show promise.
  • Premium assets in well-located micro-markets with sustainability features to command premium pricing.
  • Anticipated alignment of demand and supply, resulting in stable vacancy rates.
  • Expectation of moderate rental growth in premium assets within select micro-markets across cities.

Hybrid working to continue being the norm

  • Persistence of hybrid working models among occupiers.
  • Rise of the ‘office-first’ approach, emphasizing collaboration and networking.
  • The majority favor ‘at least three days per week’ in the office.
  • Corporate focuses on partnership with developers for enhanced workplace experience.
  • Key areas of partnership: amenities & services, facilities management, administrative support, sustainability, and technology.

Return-to-office (RTO) a top priority for occupiers

  • Occupiers increasing their Return to Office (RTO) plans.
  • Anticipated rise in occupancies across different industry sectors and organizations.
  • Focus on creating experiential workplaces that cater to multiple generations.
  • Emphasis on amenities promoting employee health and wellness.
  • Key areas of focus for occupiers based on CBRE’s India Office Occupier Survey in Apr-Jun ‘23:
    • Increasing investment in worktech (63%).
    • Coordination among supporting functions (53%).
    • Workplace transformation budgets (51%).