India’s office space market showed a strong rebound in the first quarter of 2023, with net leasing jumping 54% year-on-year to 12.78 million square feet across seven key cities, according to data from real estate consultancy JLL India. This sharp rise in net absorption highlights the growing demand from corporates for flexible and traditional workspaces as businesses expand or return to physical offices.

Net absorption refers to the space occupied by companies after accounting for any space vacated. This metric excludes pre-committed spaces that have not been physically occupied yet. The numbers reflect renewed confidence among occupiers and point to a steady recovery in the commercial real estate sector after pandemic-driven disruptions.

Gross leasing — which includes all finalized lease deals, including pre-commitments but not renewals — also saw a notable rise. It reached 19.46 million square feet in Q1 2023, marking a 28% increase year-on-year. Notably, this is the highest gross leasing activity recorded in any first quarter of a calendar year, setting an optimistic tone for the months ahead.

The leasing activity spanned India’s seven major office markets — Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, and Pune. These cities continue to attract occupiers due to strong infrastructure, access to talent, and a growing ecosystem of flexible workspace options. Bengaluru and Hyderabad, traditionally tech-driven markets, remain key contributors to this growth.

The surge in leasing reflects evolving workplace strategies among companies. With hybrid work models becoming more mainstream, many businesses are reconfiguring their office footprints rather than downsizing. This has boosted demand for Grade A office spaces and flexible coworking environments that offer scalability and cost efficiency.

For the coworking and flexible space industry, these numbers are encouraging. The upward trend in net and gross leasing signals growing occupier interest in conventional office spaces and agile, on-demand workspace solutions. Operators and landlords may benefit from this rising momentum as corporate occupiers seek long-term stability and short-term adaptability.

As the year unfolds, the commercial real estate sector is poised for continued growth, supported by improved market sentiment, economic stability, and increasing workplace occupancy. For industry stakeholders, staying aligned with shifting occupier needs — including flexible lease terms and hybrid-ready setups — will be key to capturing future demand.