New Delhi [India], October 4 : India's office leasing market is projected to achieve a record high of nearly 70 million sq. ft. in 2024, driven by the expansion of Global Capability Centres (GCCs), according to a report by CBRE.
GCCs are expected to account for 35-40 per cent of the total office leasing activity across India's top nine cities.
Bengaluru continues to lead office space absorption, accounting for 30 per cent of total leasing from January to September 2024, followed by Delhi-NCR and Hyderabad with 14 per cent each, Chennai with 13 per cent, and Mumbai and Pune contributing 12 per cent each.
Bengaluru, Hyderabad, and Pune also dominated supply additions, collectively representing 63 per cent of new office space during this period.
The last peak in office leasing was recorded in 2019, with 66.6 million sq. ft. leased. However, the growing demand from both global and domestic occupiers is set to surpass this level in 2024.
Between January and September 2024, India's office sector witnessed gross absorption of 53.8 million sq. ft. across the top nine cities, reflecting a 19 per cent year-on-year growth and marking the highest leasing activity for this period. A total of 37.5 million sq. ft. of new office supply was also recorded during this time.
Technology companies led the leasing market, accounting for 23 per cent of the total office space absorption, followed by flexible space operators at 19 per cent and BFSI firms at 16 per cent.
Engineering and manufacturing firms made up 9 per cent, while life sciences, along with research, consulting, and analytics, each accounted for 7 per cent.
Domestic firms led office absorption with a 42 per cent share, primarily driven by flexible space operators, technology companies, and BFSI firms.
In the July-September 2024 quarter, office leasing hit a quarterly record of 19 million sq. ft., with Bengaluru, Mumbai, and Hyderabad driving nearly two-thirds of the total leasing.
Technology companies held a 19 per cent share, followed by BFSI firms (18 per cent), flexible space operators (17 per cent), and engineering and manufacturing firms (9 per cent).
Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, "A growing number of industries are recognising the potential of Indian talent and establishing their GCC operations."
He added, "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."
Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE India, said, "The 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".