The demand for Grade A office space in India has reached unprecedented levels, with approximately 47 million square feet leased across the top six cities in the first three quarters of 2024, reflecting a robust 23% year-on-year growth. Q3 2024 alone saw strong leasing activity of 17.3 million square feet, marking a 31% increase compared to the same quarter last year.
Bengaluru and Hyderabad were the driving forces behind this surge, together accounting for over half of the quarterly space uptake. Bengaluru recorded its highest-ever quarterly leasing at 6.3 million square feet, while Pune witnessed a remarkable 160% increase with 2.6 million square feet leased, compared to Q3 2023.
New office supply also kept pace with demand, with completions totaling 14.4 million square feet in Q3 2024, a 33% increase year-on-year. Bengaluru and Hyderabad contributed significantly to this new supply, while Delhi-NCR saw its highest quarterly infusion in the last two years, adding 3.3 million square feet, primarily in the South Delhi micro-market.
“Office demand across various sectors has been impressive over the past few years, resulting in new leasing highs,” stated Arpit Mehrotra, Managing Director of Office Services, India, at Colliers. He noted that large-sized deals of over 100,000 square feet constituted 65% of total leasing in Q3 2024, highlighting the confidence occupiers have in the market.
The technology and BFSI sectors continued to lead the demand for office space, with the tech industry driving approximately 25% of the overall demand in Q3. Flex space leasing also hit a new quarterly high, with 3.4 million square feet leased, accounting for nearly 20% of total leasing activity.
Overall, vacancy rates remained stable, hovering around 17% at the end of Q3 2024, as demand continued to outstrip supply in major markets. With the strong performance of Grade A office leasing, the outlook for the rest of the year remains optimistic, particularly as large enterprises seek to expand their footprints in key urban centers.
Also Read: Flex Spaces to Play Major Role in Office Expansion, Survey Reveals
