MUMBAI, 02 OCTOBER 2024: India’s office market is experiencing unprecedented growth, with gross leasing activity reaching a staggering 53.43 million sq. ft in the first three quarters of 2024, according to a recent report by JLL. The numbers indicate a strong trajectory, setting the stage for an anticipated total of 70 million sq. ft by year-end, a remarkable increase from 2023.

Flex Space Takes Center Stage: A New Leader in Leasing

In a notable shift, the flexible workspace segment emerged as the largest contributor to Q3 leasing, claiming 22% of the total activity. This trend highlights the evolving needs of businesses post-pandemic, with global capability centers (GCCs) accounting for 36.2% of leasing, reaffirming their dominance in the market.

Bengaluru and Delhi NCR: Leaders in Leasing Activity

Bengaluru continues to lead the pack with a 24.6% share of Q3 leasing, closely followed by Delhi NCR at 23.1%. Together, these cities represent the epicenter of office leasing in India, with Mumbai and Hyderabad also showing strong performance. The combined share of these top cities reached an impressive 63.6% for the year-to-date period.

Domestic and Global Demand Driving Resilience

The report indicates that global occupiers are driving the market, representing 56.8% of leasing activity in Q3. Meanwhile, domestic firms continue to expand, now accounting for 44.5% of gross leasing in 2024. This balance underscores the resilience and renewed appetite for real estate in India’s office market.

Declining Vacancy Rates Indicate Strong Market Health

The overall vacancy rate across the top seven cities has dropped to 16.8%, the lowest in two years, as robust demand continues to absorb available space. This decline, along with a 14.9% increase in net absorption to 12.16 million sq. ft, indicates a healthy market poised for further growth.

A Promising Outlook for the Future

The outlook for India’s office market remains bright, driven by expansion from existing GCCs and the entry of new players. As the country strengthens its position in the global economy, the demand for office space is expected to rise, paving the way for a transformative year ahead in commercial real estate.