Office space leasing in India’s major cities surged 44% in Q1, hitting 11.5 million sq ft, led by Mumbai, Bengaluru, and Chennai. Despite declines in some cities, the robust demand suggests a market shift, with a 33% increase in gross leasing, indicating strong corporate expansion trends.
The office space sector is witnessing a significant surge, with net leasing of office space climbing by 44% in the first quarter of the year, reaching an impressive 11.5 million square feet across eight major Indian cities. This growth, driven by corporate expansions, marks a robust resurgence in demand, according to a recent report by real estate consultancy Cushman & Wakefield.
This quarter’s figures are not just numbers; they represent the third-highest level of demand recorded in the past five years, signalling a solid business appetite for office spaces. The report indicates a notable rise in net leasing in vital urban centres like Bengaluru, Mumbai, Delhi-NCR, and Chennai. However, it’s not all upward trends, as cities like Pune, Hyderabad, Kolkata, and Ahmedabad experienced declines.
Anshul Jain, a top executive at Cushman & Wakefield, expressed optimism about the market’s trajectory, noting the unprecedented record of 20 million square feet in gross leasing for two consecutive quarters. “This strong performance may signal a shift and has the potential to become the new standard for the Indian office market,” Jain stated.
The data reflects a 33% increase in gross leasing of office space, which stood at 20.13 million square feet in the January-March period, up from the previous year. This growth underscores a burgeoning tenant interest, indicating sustainable momentum in office space demand. “The impressive surge in office demand is primarily driven by fresh leasing,” Jain added, highlighting the balanced supply pipeline and continued tenant interest as key growth drivers.
Mumbai and Bengaluru led the charge with significant jumps in net office leasing. Mumbai’s net leasing tripled, reaching nearly 2.5 million square feet, while Bengaluru’s figures more than doubled to approximately 3.6 million square feet. Chennai and Delhi-NCR also saw healthy growth rates, with 77% and 18% increases in net leasing, respectively.
Despite the overall positive trend, some cities like Kolkata and Ahmedabad faced sharp declines, with net leasing dropping by 82% and 53%, respectively. This mixed regional performance illustrates the varied pace of recovery and expansion across different markets.
The robust demand for flexible workspace solutions continues to shape the market dynamics, as highlighted by Nikhil Madan, co-founder of The Office Pass. The sector is poised for further expansion with a growing trend towards work-from-office and hybrid models. “The enquiries for spaces are constantly on the rise,” Madan observed, underscoring the sustained interest in flexible office solutions.
This buoyant market sentiment indicates the office space sector’s resilience and potential for growth, setting the stage for a dynamic and evolving landscape in the coming months.
