Bengaluru led office space absorption across India during the January-September period of 2024, accounting for about 30% of the total leasing at 16.4 million square feet, a report by property consultancy CBRE said on October 4.
During the July-September quarter, Bengaluru recorded office leasing to the tune of 7.1 million square feet as against 3.4 million square feet in the same period last year.
Overall, the office sector witnessed a gross absorption of 53.8 mn sq ft between January-September across nine key cities – Bengaluru, Mumbai, Delhi-NCR, Hyderabad, Chennai, Pune, Kochi, Kolkata, and Ahmedabad – recording a 19% year-on-year growth and marking the highest leasing activity ever for the nine-month period. According to the report, a total supply of 37.5 million square feet was recorded during the same period.
Also Read: Bengaluru leads office leasing across top 8 cities in Q3 2024; records second highest housing sales at 14,604 units
Meanwhile, fresh supply of commercial real estate in the IT capital stood at 11.1 million square feet during the quarter ended September, the report added.
Key sectors that drove leasing in Bengaluru during the third quarter include technology (21%), e-commerce (17%) and flexible space operators (15%), per the report.
The report noted that Bengaluru office space take-up was driven by small-sized deals (less than 50,000 sq ft) during the period under review. The non-SEZ sector accounted for 90% of office space absorption, while the SEZ sector represented 10%. Additionally, the office supply share for the non-SEZ sector was 82%, compared to 18% for the SEZ sector.
Pan-India scenario
On a pan-India basis, according to CBRE, office leasing is likely to register a record high of approximately 70 mn sq ft in CY 2024 across top nine cities in India as per current estimates. The last highest office leasing was recorded in calendar year 2019 at 66.6 mn sq ft.
โThe office demand will be driven by both global and domestic occupiers, who are expected to continue expanding their operations and consolidating their facilities to strengthen their market presence. GCCs are poised to expand significantly in India, accounting for about 35-40% of the total office leasing,โ the report noted.
Also Read: Bengaluru to dominate India’s commercial real estate market with 330-340 mn sq feet office stock by 2030: Report
During the January-September period Delhi-NCR and Hyderabad contributed a 14% share each to total office leasing across the top nine cities, while Chennai accounted for 13%. Mumbai and Pune, each contributed 12%.
The report noted that Bengaluru, Hyderabad, and Pune led the supply additions during the nine-month period, collectively accounting for a 63% share.
As per the report, technology companies saw the highest share and accounted for 23% of the total office leasing, followed by flexible space operators at 19%, and BFSI firms at 16% during January-September 2024. Engineering and manufacturing held a 9% share, while both research, consulting and analytics, and life sciences saw a 7% contribution, respectively.
Also Read: Office leasing up 31% annually to 17.3 mn sq ft across top six cities in Q3 2024; Bengaluru and Hyderabad drive demand
Additionally, domestic firms led absorption, comprising 42% of the market between January-September. Flexible space operators, technology corporates, and BFSI firms primarily drove domestic absorption during the same period, per the report.
On a quarterly basis, office leasing in July-September stood at 19 mn sq ft across the top nine cities, the highest ever in the same period. Bengaluru, followed by Mumbai and Hyderabad, led the absorption, together accounting for nearly two-thirds of the space take-up during the quarter.
