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CBRE Report Forecasts Historic High of 70 Million Sq. Ft. in Office Leasing Across India in 2024
Delhi-NCR / October 4, 2024: Real estate consulting firm CBRE South Asia Pvt. Ltd today announced the findings of its report: CBRE India Office Figures Q3 2024. According to CBRE, office leasing is likely to record a historic high of 70 mn. sq. ft in CY 2024 across top 9 cities in India as per current estimates. The last highest office leasing was recorded in CY 2019 at 66.6 mn. sq. ft. The office demand will be driven by both global and domestic occupiers, who are expected to continue expanding their operations and consolidating their facilities to strengthen their market presence. GCCs are poised to expand significantly in India, accounting for about 35-40% of the total office leasing, CBRE said in a press statement.
According to the CBRE report, the office sector witnessed a gross absorption of 53.8 mn. sq. ft. during Jan-Sep ‘24 across nine key cities – Bengaluru, Mumbai, Delhi-NCR, Hyderabad, Chennai, Pune, Kochi, Kolkata, and Ahmedabad, recording a 19% Y-o-Y growth, marking the highest leasing activity ever for the Jan-Sep period. According to the report, a total supply of 37.5 mn. sq. ft. was recorded during the Jan-Sep’24 period, the statement added.
Bengaluru has emerged as the frontrunner in office space absorption during the January to September 2024 period, accounting for approximately 30% of the total leasing activity. Following closely are Delhi-NCR and Hyderabad, each contributing 14%, while Chennai accounted for 13%, and both Mumbai and Pune contributed 12% each. Notably, Bengaluru, Hyderabad, and Pune also led in supply additions, collectively representing 63% of the new office spaces introduced during the same timeframe.
A recent report highlights that technology companies accounted for the largest share of office leasing, representing 23% of the total, followed by flexible space operators at 19% and banking, financial services, and insurance (BFSI) firms at 16%. Engineering and manufacturing sectors contributed 9%, while research, consulting and analytics, as well as life sciences sectors, each accounted for 7%.
Domestic firms played a significant role in market absorption, making up 42% of the total during this period. The leasing activity was primarily driven by flexible space operators, technology corporations, and BFSI firms.
In the third quarter of 2024 (July to September), office leasing reached an impressive 19.0 million square feet, marking the highest absorption recorded for this period. Bengaluru once again led the charge, followed by Mumbai and Hyderabad, which together accounted for nearly two-thirds of the space uptake.
On a quarterly basis, technology companies maintained a robust share of 19% in driving overall office leasing activities, closely followed by BFSI firms at 18%, and flexible space operators at 17%. Engineering and manufacturing companies accounted for 9%, while life sciences firms held an 8% share. Both e-commerce and research, consulting, and analytics companies each represented 7%.
During the July to September 2024 quarter, approximately 15.3 million square feet of office space was completed, reflecting a 14% increase quarter-on-quarter. The supply addition was predominantly driven by Hyderabad, Bengaluru, and Kochi, which collectively contributed about 65%. Additionally, demonstrating a commitment to sustainability, over three-fourths of the newly completed spaces in this quarter received green certification (LEED or IGBC-rated).
Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “India’s office market leasing is projected to remain strong in CY2024, with Q3 2024 reflecting sustained absorption. The demand is driven by global and domestic occupiers, who are expected to continue expanding their operations and consolidating their facilities to strengthen their market presence. A growing number of industries are recognising the potential of Indian talent and establishing their GCC operations. 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 favourable business climate. Moreover, the stable political landscape provides a conducive environment for consistent policy implementation, thereby promoting market confidence and a positive outlook.”
Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE India, said, “India’s office market remains resilient, driven by a diversified demand base encompassing various sectors, cities, and regional occupiers, aiding the sector to mitigate the impact of global fluctuations on demand. Office market is poised to expand significantly in India, driving demand for both traditional and flexible workspaces as new firms establish their global centres, and the existing firms scale up. Sectors such as life sciences, automotive, and aerospace are also looking to expand their GCC presence in the country”.
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