Office leasing across top 9 cities touches 32.8 mn sq ft in Jan-June; Bengaluru leads office leasing at 8.5 mn sq ft

Office leasing touched 32.8 mn sq ft during January to June period, recording an increase of 14% year-on-year across nine cities, a report by CBRE South Asia Pvt. Ltd said on July 4.

Bengaluru led office space absorption, accounting for about one-fourth of the total leasing during January to June 2024 period, followed by Delhi-NCR at 16%, Chennai at 14%, Pune and Hyderabad each contributing 13%. 

Also Read: Office leasing touches 33.5 mn sq ft in the first half of the year, up by 29%: JLL

Bengaluru, Hyderabad, and Mumbai led supply additions, collectively accounting for 69% of the total in the same period, according to CBRE’s India Office Figures Q2 2024.

Global Capability Centres drive office leasing in January-June period with a 37% share

Global Capability Centres (GCCs) leased close to 11.9 mn. sq. ft. office space in January-June 2024 period which was almost 37% of the overall office leasing in India. BFSI firms and technology companies contributed to about 45% of the total leasing by GCCs during the same period.

Also Read: Office leasing records 16.7 mn sq ft in Q1 2024, witnessing a 20% growth y-o-y

Bengaluru had the highest share of GCC leasing, at 39%, followed by Pune at 20%, while Hyderabad and Chennai at 17% and 11%, respectively, during Jan-Jun ’24.

Leasing by IT firms returns

Technology companies held a share of 29% in leasing activity in Apr-June ‘24, up from 26% witnessed in Jan-Mar ‘24.

This was followed by banking, financial services, and insurance (BFSI) firms at 17%, and research, consulting and analytics (RCA) companies and flexible space operators at 12% each. Life sciences firms accounted for a 9% share in leasing.

During Apr-Jun ’24 period, American firms led the absorption, accounting for a share of around 39%. The report indicates US technology companies saw the highest share and accounted for 28% of the total office leasing, followed by flexible space operators at 16%, BFSI firms at 15%, engineering and manufacturing (E&M) at 9% and research, consulting and analytics firms (RCA) at 8% during Jan-Jun ‘24.

Additionally, domestic firms led absorption, comprising 43% of the market during Jan-Jun ‘24. Flexible space operators, technology firms, and BFSI corporates predominantly drove domestic leasing activity in the first half of 2024.

The nine cities included in the report were Bengaluru, Mumbai, Delhi-NCR, Hyderabad, Chennai, Pune, Kochi, Kolkata, and Ahmedabad.

Also Read: Leasing by Global Capability Centres in India increases by 17%; touches 22.5 mn sq ft in FY 2023-24

According to the report, total supply of 22.1 mn. sq. ft. was recorded during Jan-Jun’24 period.

Bengaluru, Pune and Chennai led in office space take up

Bengaluru, followed by Pune and Chennai led in office absorption in Apr-Jun ‘24, together accounting for about 57% of the leasing activity.

Development completions of about 13.2 mn. sq. ft. was witnessed in Apr-June ‘24, up by 49% Q-o-Q, and 11% Y-o-Y. Bengaluru, Mumbai and Hyderabad drove supply addition during the quarter with a cumulative share of about 69%.

The non-SEZ segment dominated development completions with a share of 90% in Q2 2024.

Developers continued to exhibit their efforts towards sustainability, with over three-fourths of the newly completed space during Q2 2024 being green-certified (LEED or IGBC-rated).

“Amidst a dynamic landscape, the first half of 2024 witnessed a surge in office space absorption driven by GCCs, flexible workspace operators, BFSI, and tech firms. Towards the later part of 2024, the demand for quality office spaces is poised to remain strong as portfolios expand and utilization rates rise,” said Anshuman Magazine, chairman and CEO - India, South-East Asia, Middle East & Africa, CBRE.