According to CBRE, office space supply in India’s top nine cities surged by 46% to 13.4 million sq ft in early 2019, led by Hyderabad’s unprecedented growth. With demand from corporates and coworking operators rising, developers are investing in flexible workspaces and SEZs to support expanding businesses and startups.
The demand for office space in India’s major cities continues to grow, with developers increasing supply to meet the needs of corporates and coworking operators. According to CBRE’s latest report, office space supply rose 46% to 13.4 million square feet in the January-March 2019 period, compared to 9.2 million square feet in the same period in 2018. This growth spanned nine significant cities: Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad, and Kochi.
Hyderabad led the increase, with a dramatic supply surge to 5.2 million square feet, up from just 0.7 million square feet the previous year. This jump reflects a significant rise in office space demand in Hyderabad, which reached 3.5 million square feet and exceeded demand in Bengaluru for the first time. CBRE’s report highlighted Hyderabad’s impressive growth as developers focus on satisfying the region’s appetite for new office space, including pre-committed Special Economic Zones (SEZs).
“SEZs continued to account for a third of the quarter’s supply, rising by almost 40% compared to Q1 2018,” the report noted. In Hyderabad, most SEZ supply was already pre-committed, as developers avoided speculative investment in this segment, ensuring that new spaces met specific client needs before breaking ground.
The Delhi-NCR region also grew, with office space supply increasing to 1.5 million square feet from 1.2 million square feet. Similarly, Chennai experienced an increase in supply to 0.5 million square feet, more than double from 0.2 million square feet in the previous year. However, not all cities shared the upward trend; Mumbai’s supply declined to 1.3 million square feet from 1.8 million square feet, and Bengaluru saw a drop to 2.6 million square feet from 3.9 million square feet. Pune and Kolkata remained steady or saw slight dips, with Pune’s supply falling from 1.2 million square feet to 0.2 million square feet.
In Ahmedabad, office space supply rose dramatically from virtually nothing in 2018 to 1.8 million square feet in 2019. The rise in supply across these cities points to a significant shift in India’s office real estate landscape, driven by companies expanding into flexible workspaces, coworking, and SEZs to maximise productivity and cost efficiency.
As companies across sectors prioritise modern, scalable office solutions, real estate developers are responding with substantial investments in new office infrastructure. This aligns with broader workplace transformation trends in India, where coworking spaces are becoming essential to businesses looking to scale up or down based on operational needs.
The CBRE report captures a transformative period for India’s office space market, reflecting growing confidence among developers and investors. This increase in supply indicates that the market is preparing for sustained demand growth as more corporations, including tech companies and startups, choose flexible, collaborative spaces over traditional offices.
