India’s Office Leasing Market Set to Reach New Heights in 2024
India’s office leasing market is expected to hit a record high of nearly 70 million square feet in 2024, driven by the growth of Global Capability Centres (GCCs), according to a report by CBRE. GCCs are projected to make up 35-40% of the total office leasing activity in India’s top nine cities.
Leading Cities in Office Space Absorption
Bengaluru is at the forefront, accounting for 30% of total leasing from January to September 2024. It is followed by Delhi-NCR and Hyderabad with 14% each, Chennai with 13%, and Mumbai and Pune with 12% each. Bengaluru, Hyderabad, and Pune also lead in new office space supply, representing 63% of additions.
Growth in Office Leasing
The last peak in office leasing was in 2019 with 66.6 million sq. ft. leased. The demand from global and domestic occupiers is expected to surpass this in 2024. From January to September 2024, gross absorption reached 53.8 million sq. ft., a 19% year-on-year growth, marking the highest leasing activity for this period. New office supply totaled 37.5 million sq. ft.
Key Players in the Market
Technology companies lead the market with 23% of total office space absorption, followed by flexible space operators at 19% and BFSI firms at 16%. Engineering and manufacturing firms account for 9%, while life sciences, research, consulting, and analytics each make up 7%.
Domestic and Global Influence
Domestic firms lead office absorption with a 42% share, driven by flexible space operators, technology companies, and BFSI firms. In the July-September 2024 quarter, office leasing hit a record 19 million sq. ft., with Bengaluru, Mumbai, and Hyderabad contributing nearly two-thirds of the total.
Expert Insights
Anshuman Magazine, Chairman & CEO of CBRE, highlighted the growing recognition of Indian talent and the establishment of GCC operations. He noted India’s economic resilience and favorable business climate. Ram Chandnani, Managing Director at CBRE India, emphasized the expansion of the office market and the demand for both traditional and flexible workspaces.
Doubts Revealed
Office Leasing Market -: This refers to the renting of office spaces by companies and businesses. It’s like when you rent a house, but here, companies rent spaces to set up their offices.
Bengaluru -: Bengaluru, also known as Bangalore, is a city in India. It is famous for being a major hub for technology companies and startups.
Global Capability Centres (GCCs) -: These are offices set up by international companies in different countries to handle various business operations. They help companies manage tasks like customer support, finance, and technology development.
Delhi-NCR -: Delhi-NCR stands for Delhi National Capital Region. It includes Delhi and nearby cities like Gurgaon and Noida, which are important business areas in India.
Hyderabad -: Hyderabad is a city in India known for its technology industry and historical landmarks. It is one of the major cities where companies set up their offices.
Technology Companies -: These are companies that create and work with technology products and services, like software, computers, and the internet. Examples include companies like Infosys and TCS in India.
Domestic Firms -: These are companies that are based in India and operate mainly within the country. They are different from international companies that have offices in many countries.
Economic Resilience -: This means the ability of a country’s economy to recover quickly from difficulties, like financial problems or global events. It shows how strong and stable the economy is.
Favorable Business Climate -: This refers to the conditions in a country that make it easy and attractive for businesses to operate, such as good government policies, infrastructure, and a skilled workforce.