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India's office space leasing across eight major cities is projected to increase by 14% in 2024, reaching a record 85 million square feet, according to Cushman & Wakefield. The growth is being driven by demand in sectors like IT-BPM, BFSI, engineering, and flex spaces. The consultant predicts that fresh leasing, particularly from Global Capability Centres (GCCs) and expanding domestic companies, will make up 70% of the gross leasing volume. The market is also witnessing upward pressure on rents in prime areas due to the expected surge in leasing activity.
The leasing of office space across India's eight major cities is expected to rise by 14% this year, reaching an all-time high of 85 million square feet, according to a recent report by Cushman & Wakefield. In 2023, the gross leasing volume stood at 74.6 million square feet. This increase highlights the continued growth of India's office real estate market. India's office space sector has consistently seen leasing volumes above 70 million square feet annually across these cities since 2022. The consultant noted that 2024 is likely to see the highest-ever volume, with expectations for gross leasing to hit between 83-85 million square feet. Advertisement
As of the January-September period of 2024, leasing activity has already reached 66.7 million square feet. Over the past few years, the volume has fluctuated, with figures standing at 49.1 million square feet in 2018, 67.7 million square feet in 2019, and 74.6 million square feet in 2023.
The surge in leasing activity is primarily driven by strong demand from sectors like IT-BPM, BFSI, engineering, manufacturing, and flexible office spaces, which have been top performers. Cushman & Wakefield highlighted that fresh leasing, which reflects growing business activity, has been the main contributor to the overall leasing volume. For 2024, it is expected that nearly 70% of the gross leasing volume will come from fresh leases, driven by the expansion of Global Capability Centres (GCCs) and the growth of domestic businesses.
Veera Babu, Managing Director of Tenant Representation at Cushman & Wakefield, mentioned that 2024 is shaping up to be a record-breaking year for India's office leasing market, with gross leasing volumes expected to reach 85 million square feet. He also projected net absorption of around 45 million square feet, the highest ever recorded in Indian commercial real estate.
GCCs are predicted to contribute nearly 30% of the total office space leasing. The rise in demand for prime office spaces is also expected to lead to upward pressure on rents, particularly in high-demand micro-markets. However, with a consistent influx of new office supply expected in 2025, rent increases are likely to remain moderate, helping to maintain a tenant-friendly market in the near term.
India's office space market is on track to reach new heights in 2024, with leasing volumes expected to hit 85 million square feet, marking a historic high. The growth is fuelled by fresh leasing from expanding businesses, particularly Global Capability Centres and domestic companies. While rents in prime areas are expected to rise due to increasing demand, the steady influx of new supply in the coming years will help maintain a favourable environment for tenants. This trend highlights the ongoing strength of the office real estate sector in India.
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