Chennai: The Indian office market is poised for another record-breaking year, with leasing across the top 8 cities anticipated to cross 80 million square feet in 2024. This would be the third consecutive year of surpassing the 70 msf milestone.
According to a report by Cushman and Wakefield, the first half of 2024 recorded 41.9 msf of leasing, marking the highest leasing volume ever for the first half of any year. This represents 56 per cent of the total gross leasing volume (GLV) for 2023. This growth is driven primarily by fresh demand from multinational corporations, the optimisation of pre-leased buildings in key cities, and a higher return to the office. The market is anticipated to maintain its strong momentum throughout the year with over 40 msf expected to be leased in the second half.
Q2 2024 alone saw a GLV of 21.8 msf across the top 8 cities, reflecting a 27 per cent year-on-year increase and an 8.4 per cent growth over the previous quarter. Further, GCC transactions accounted for 26 per cent of the total GLV in H1 2024. According to the report, around 120 GCC centers were established during the period. Bengaluru led the way, accounting for 47 per cent of leasing by GCCs in H1 2024.
In terms of the cities, Bengaluru, Mumbai, Hyderabad, and Kolkata recorded the highest-ever leasing figures in H1 2024. Bengaluru and Mumbai saw the highest growth of 132 per cent and 71 per cent on a y-o-y basis, followed by Hyderabad and Kolkata.
Net absorption in H1 2024 also reached new heights, recording a 46 per cent year-on-year growth—the highest for any first half since 2020. While Bengaluru had the highest share of 29 per cent net absorption amongst all top-8 cities in the first half of the year, cities such as Mumbai, Delhi-NCR, Chennai, and Kolkata recorded their highest-ever biannual net absorption.
New supply for the first half of 2024 stood at 20.8 MSF, with Hyderabad and Bengaluru together accounting for approximately 51 per cent of the new supply. Hyderabad led with a 27 per cent share, while Bengaluru continued its strong performance as a key driver of the market.
Looking ahead, Hyderabad and Bengaluru are projected to lead new supply in 2024, with a combined share of 48 per cent. Mumbai is expected to experience a threefold increase in new supply, further boosting the overall market.
