Surge in Demand Driven by Technology and Financial Sectors

India is set to witness a historic peak in office space leasing, projected to reach approximately 70 million square feet in 2024, as per the latest report from real estate consultancy CBRE released on Friday. This marks a significant recovery, surpassing the previous high of 66.6 million square feet recorded in 2019.

The report, titled CBRE India Office Figures Q3 2024, highlights that from January to September 2024, the office sector experienced robust leasing activity, totaling 53.8 million square feet—a notable 19% increase compared to the same timeframe last year.

Key Factors Driving Growth

Anshuman Magazine, chairman and CEO of CBRE for India, South-East Asia, the Middle East, and Africa, attributes this surge to both global and domestic occupiers expanding operations and consolidating their facilities to enhance market presence. “The demand is being fueled by technology, BFSI (banking, financial services, and insurance), and flexible space operators,” he noted.

In terms of sector contributions, technology companies dominated the office leasing landscape, accounting for 23% of the total. Flexible space operators followed closely with 19%, while BFSI firms contributed 16%.

Quarterly Highlights: Record Leasing Activity

The July-September quarter set a new benchmark with office leasing reaching 19 million square feet, marking the highest quarterly figure for the year. Within this period, technology companies secured 19% of the leased space, BFSI firms held 18%, and flexible space operators accounted for 17%.

Looking ahead to 2024, the technology sector is expected to further strengthen its lead, with predictions indicating a share of 25-30% in total leasing activity. “We anticipate a broader demand base this year, driven by continued resilience from BFSI, flexible space operators, and entertainment & media companies,” CBRE stated.

Emerging Trends in Office Leasing

Global Capability Centres (GCCs) are projected to capture the largest share of office leasing, accounting for 35-40% of the total. In the most recent quarter, GCCs represented an impressive 44% of all leasing activity.

The report highlights that BFSI firms, e-commerce companies, and technology corporates collectively contributed to approximately 58% of total leasing in GCCs across the country. Additionally, sectors like life sciences, FMCG, retail, and entertainment & media have been actively establishing their GCCs during this period.

As India’s office space leasing trajectory continues upward, industry experts are optimistic about sustained growth across various sectors, signifying a dynamic shift in the country’s commercial real estate landscape.