Office Space Leasing to Surge 14% in 2024: Cushman & Wakefield

New Delhi, Dec 16 (PTI) Gross leasing of office space across eight major cities is likely to rise 14 per cent to touch a record 85 million square feet this calendar year, according to Cushman & Wakefield.

The gross leasing of office space stood at 74.6 million square feet in 2023 across eight cities -- Bengaluru, Hyderabad, Mumbai, Delhi-NCR, Chennai, Pune, Kolkata and Ahmedabad.

"India's office real estate has consistently been witnessing more than 70 million square feet of gross leasing volume (GLV) since 2022 across the top 8 cities. The current year 2024 is likely to register a historic high volume of 83-85 million square feet of GLV," the consultant said in its round-up for the calendar year.

Already, during the January-September period of 2024, the gross leasing has reached 66.7 million square feet.

Office leasing stood at 49.1 million square feet in 2018; 67.7 million square feet in 2019; 46.6 million square feet in 2020; 50.4 million square feet in 2021; 72 million square feet in 2022; and 74.6 million square feet in 2023.

The growth is driven by healthy volumes seen in the IT-BPM, BFSI, Engineering & Manufacturing and flex operator spaces, as these were the top-performing sectors, the consultant said.

"Fresh leasing of space, an indicator of growing business activity in India, has been the biggest contributor to GLV. For the full year 2024, a fresh lease is likely to account for nearly 70 per cent, stemming from new entrant GCCs (Global Capability Centres) and expansion in operations of domestic firms," Cushman & Wakefield said.

Veera Babu, Managing Director, Tenant Representation, Cushman & Wakefield, said "2024 is shaping up to be a record-breaking year for India's office sector, with gross leasing volumes expected to reach around 85 million square feet and net absorption of about 45 million square feet —the highest ever recorded in Indian commercial real estate."

The GCCs are likely to contribute nearly 30 per cent of the total gross office space leasing, he added.

The consultant said that the expected surge in leasing across top-grade assets in 2024 and 2025 has been putting upward pressure on rents across prime micro-markets.

"Bulk of the new supply that is coming in 2025 is concentrated around prime micro-markets, suggesting that overall rents could witness a rise. However, the rise is anticipated to be moderate owing to the consistent influx of supply, thereby helping a tenant-favourable market sentiment to persist for some time," Cushman & Wakefield said.