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JLL's latest report indicates a recovering office real estate market in India, with net absorption rising 14% year-on-year to 12.16 million square feet in the third quarter of the fiscal year. Bengaluru leads with a significant increase in demand, while Chennai, Delhi, and Pune also report growth. In contrast, Hyderabad and Kolkata experienced declines in net absorption. Over the first nine months, total net absorption reached 31.03 million square feet, up 19% year-on-year. Experts anticipate continued growth in the sector, reinforcing India's position as a leading destination for office space amidst expanding global demand.
According to recent data from real estate consultancy JLL, the demand for office space in India has been rising, particularly in major cities. Net absorption, which refers to the total new office space occupied minus the space vacated, is a key indicator of this demand. The report covers the performance of the office market during the third quarter (July-September) of the fiscal year, providing insights into trends across seven significant urban areas. Advertisement
In the third quarter of the fiscal year, net absorption of office space across seven major Indian cities rose by 14% year-on-year, reaching 12.16 million square feet, compared to 10.69 million square feet during the same period last year. This increase indicates robust demand in the office real estate sector, reflecting a recovering and expanding market.
Bengaluru experienced the highest demand, with net absorption increasing to 4.14 million square feet from 2.38 million square feet the previous year, showcasing substantial growth in office space uptake. Chennai also saw an increase in net absorption, rising to 1.05 million square feet from 0.90 million square feet, indicating steady demand. Similarly, Delhi recorded a slight uptick in net absorption to 1.92 million square feet, compared to 1.70 million square feet previously. Pune experienced significant growth, with net demand climbing to 1.80 million square feet, up from 1.34 million square feet.
In contrast, Hyderabad saw a decline in net absorption, which fell to 1.26 million square feet from 2.70 million square feet, suggesting a decrease in demand. Kolkata experienced a similar trend, with demand dropping to 0.13 million square feet from 0.14 million square feet year-on-year. Overall, over the first nine months of the fiscal year, net absorption totalled 31.03 million square feet, representing a 19% increase compared to the same period last year. JLL noted that this trend indicates a sustained expansion in office space, supporting growth in employment and operational capacity for both global and domestic companies. The data suggests that the performance in the first nine months of 2024 is the second-best in a decade, following 2019 figures.
JLL's analysis suggests that the office real estate market in India is recovering, particularly in several major cities that have experienced significant growth. However, it notes that cities like Hyderabad and Kolkata have seen a decline in demand. Despite these challenges, the overall outlook appears positive, with ongoing growth in the sector anticipated.
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