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India Office Market Report India Office Market Report

India Office Market Report


Pan India leasing volumes remained strong in Q1 2024, crossing the 20 MSF mark for the third time in the post Covid period. A gross leasing of over 20 MSF for two consecutive quarters is a significant record for the office real estate market, suggesting that activity in India is moving on a higher plane. Bengaluru remained a prime market, contributing a significant share of pan India fresh demand with several large deals witnessing closure. Mumbai, Delhi NCR, and Hyderabad also reported robust lease transactions. Q1 supply recorded robust expansion y-o-y with developers expediting project completions on the back of strong occupier demand. Hyderabad led supply addition in Q1, followed by Bengaluru and Delhi NCR. 

The active deal pipeline looks healthy as the level of pre-commitments have risen sharply over the last 2-3 quarters. As a result, the near-term outlook on office absorption remains positive. The bright outlook of the Indian economy in the near term also translates to higher space take-up by domestic firms. The resilience of the US economy, despite concerns surrounding recessionary risks, is likely to provide an additional tailwind to leasing activity this year.

Key Highlights

  • 20.1 MSF gross leasing volume (GLV) in Top 8 cities in Q1 2024; a 33% growth on an annualised basis though a 26% decline from a strong previous quarter.
  • Bengaluru was leading in terms of pan-India GLV in Q1, accounting for 33% share, followed by Mumbai, Delhi NCR, and Hyderabad with shares of 24%, 15% and 12%, respectively.
  • IT-BPM accounted for highest share (~25%) in quarterly leasing, followed by engineering & manufacturing and BFSI with 21% and 17% shares, respectively.
  • Flexible workspaces continued to remain prominent segment with a share of ~11% in Q1 GLV.
  • 12.9 MSF of new completions were recorded in Q1 2024, with Hyderabad, Bengaluru and Delhi NCR accounting for largest shares.
  • Net absorption in Q1 2024 stood at 11.5 MSF, an increase of 44% on an annualised basis, though 38% lower than the record net absorption witnessed in the previous quarter.

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