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The Indian office space market is set to surpass a record-breaking 80 million square feet of gross leasing by the end of 2024, according to a Cushman & Wakefield report. In the third quarter alone, leasing surged by 66%, reaching 24.8 million square feet across eight major cities, marking the second-highest quarterly volume ever. This growth, driven by Global Capability Centres (GCCs), highlights India's growing status as a key outsourcing hub. Low vacancy rates and robust demand suggest that this momentum will continue, potentially driving rental prices higher.
The Indian office space market is experiencing unprecedented growth in 2024, with the gross leasing volume expected to surpass 80 million square feet across eight major cities, according to a report released by Cushman & Wakefield. This represents a significant milestone, as it would exceed the 74.5 million square feet recorded in 2023, setting a new benchmark for the industry. Advertisement
During the third quarter of 2024 alone, gross leasing of office space surged by 66% to 24.8 million square feet. This marked the second-highest quarterly volume in the history of the sector, reflecting strong market fundamentals. Between January and September 2024, leasing had already reached an impressive 66.7 million square feet, with expectations that the full year will comfortably surpass the 80 million square foot mark.
The rise in leasing activity is primarily driven by Global Capability Centres (GCCs), which have continued to cement India's reputation as a global outsourcing hub. This trend highlights the country's increasing role in supporting innovation and growth on a global scale. Anshul Jain, Chief Executive for India, Southeast Asia, and APAC Tenant Representation at Cushman & Wakefield, noted that the strong market fundamentals and historically low vacancy rates in key cities underscore this extraordinary leasing momentum. He indicated that GCCs are fuelling much of this demand, with leasing likely to exceed the anticipated 80 million square feet comfortably.
Further elaborating on the trends, Veera Babu, Managing Director, Tenant Representation at Cushman & Wakefield, remarked that the market has already achieved nearly 90% of last year's total leasing volume. With average quarterly leasing volumes hovering around 20 million square feet in recent years, surpassing 80 million square feet for the full year is highly probable. He added that vacancy rates are steadily declining, a clear indication of heightened demand for office spaces amid a limited supply.
Cushman & Wakefield data showed that vacancy rates in the office space market hit a historic low of 17.1%, a 60 basis points drop quarter-over-quarter. This sharp decline demonstrates the increasing competition for office spaces. Despite an expected rise in office supply in the near future, the demand is predicted to outpace availability, potentially leading to higher rental prices in key markets like Delhi-NCR, Mumbai, Bengaluru, and Hyderabad.
As these dynamics unfold, the top eight cities being tracked-Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Pune, Kolkata, and Ahmedabad-are expected to witness sustained leasing activity. With India's office space market continuing to thrive, the outlook remains highly positive for investors and businesses alike.
This remarkable leasing momentum, coupled with increasing demand for high-quality office space, positions India as a critical player in the global office leasing landscape, setting the stage for continued growth well into the future.
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