The Indian office market reported a internet absorption of 11.5 million sq. ft (MSF) throughout the highest 8 cities in Q1-24 (January-March quarter of 2024), in accordance with office section knowledge launched by Cushman & Wakefield (C&W).
“This is the third-highest level recorded in the last five years, demonstrating a robust appetite for office space among businesses. Net absorption is a barometer of real demand or expansion of occupied space in the market,” the consulting agency mentioned.
While this quarter’s internet absorption was 38% decrease than the distinctive This autumn-2023, it was a 44% improve over Q1 2023, indicating continued space occupation by companies, it added.
As per knowledge Bengaluru and Mumbai emerged as high markets, absorbing 3.6 MSF and a couple of.5 MSF of space, respectively. They had been adopted by Hyderabad at 1.6 MSF, Delhi-NCR at 1.5 MSF and Pune at 1.3 MSF, Ahmedabad and Kolkata at 1 MSF, and Chennai at .8 MSF.
The Gross Leasing Volume (GLV) additionally remained at over 20 MSF, an increase of 33% on y-o-y foundation. Nearly a 3rd of all the India GLV was recorded in Bengaluru (6.7 MSF), adopted by Mumbai (4.8 MSF) with a share of one-quarter. The two cities mixed had a share of over 57% in complete leasing volumes for the quarter.
Anshul Jain, Chief Executive, India & Southeast Asia and Head of Asia Pacific Tenant Representation, C&W mentioned, “The Indian office market is experiencing a robust momentum. We haven’t witnessed 20 MSF of leasing being recorded for two consecutive quarters in recent history.”
“This strong performance may signal a shift and has the potential to become the new standard for the Indian market. The strong leasing, coupled with net absorption of 11.5 MSF– the third highest in the past five years (the previous being in Q4 2023 and Q2 2019) – signifies a surge in tenant interest for office space,” he mentioned.
“As witnessed in the previous quarters, the impressive surge in office demand is primarily driven by fresh leasing. We are confident that a balanced supply pipeline and continued tenant demand will propel further growth in the Indian office market,” he added.
As per knowledge, contemporary leasing continued to dominate GLV with 72% share, with pre-commitments and time period renewals taking on the stability 28% in GLV.
Among the sectors, IT-BPM and Engineering & Manufacturing sectors emerged as the foremost drivers of demand, contributing over 45% to the GLV. The BFSI and Flex Space leasing adopted with 17% and 11% shares, respectively.
The first quarter additionally witnessed near 13 MSF of recent provide. The cities that noticed the largest provide additions had been Hyderabad (2.9 MSF), Bengaluru (2.9 MSF) and Delhi-NCR (2.8 MSF). These three, collectively accounted for over 67% of the whole provide in the top-8 cities.
The new provide, coupled with sturdy absorption, led to a slight decline in the nationwide emptiness charge to 18.1%. Rents throughout most cities exhibited a slight upward development C&W mentioned.
