Knight Frank India Reports 61% of H1 Transactions in Spaces Over 50,000 sq. ft.

New Delhi, September 19, 2024 – The National Capital Region (NCR) is witnessing a significant transformation in its office space market, as new data from Knight Frank India reveals that 61% of all office transactions in the first half of 2024 involved spaces larger than 50,000 square feet. This marks a remarkable 32% year-on-year increase, with total transactions in this category reaching 3.44 million square feet, up from 2.61 million square feet in H1 2023.

Growing Demand Driven by Economic Confidence

The uptick in larger office spaces reflects the increasing confidence among India-focused businesses and the rise of flexible workspaces. Smaller offices, measuring under 50,000 square feet, accounted for 39% of transactions, amounting to 2.22 million square feet.

Anand Patil, National Director at Knight Frank India, noted, “NCR has emerged as the leader in office space transactions among India’s top eight markets. The growth in larger office leases is primarily driven by India-facing businesses and flexible spaces, fueled by the overall confidence in the economy.”

Leasing Trends and Market Dynamics

The office market in NCR recorded a robust performance in H1 2024, with total gross leasing reaching 5.7 million square feet, reflecting a 12% increase from the same period last year. New office completions during this period totaled 2.9 million square feet, further showcasing the region’s dynamic growth.

Gurugram emerged as the frontrunner, accounting for 56% of the leasing activity. High-demand areas include DLF Cyber City, Golf Course Extension Road, NH-48, and Udyog Vihar. In Noida, sectors along the Noida-Greater Noida Expressway, particularly Sectors 135, 142, and Sector 18, saw significant occupier interest.

Shift Toward Domestic and Flexible Spaces

The shift toward leasing office spaces to India-facing businesses is notable, with their share increasing from 49% in H1 2023 to 55% in H1 2024. This trend underscores a growing focus on domestic enterprises in light of a strengthening economy. Additionally, flexible office spaces constituted 26% of total leasing, while Global Capability Centres (GCCs) made up 11%, and third-party IT service providers accounted for 9%.

As the NCR office market continues to evolve, the outlook remains optimistic, driven by increasing demand for larger and more flexible office spaces amidst a vibrant economic landscape.