India’s office lease market zooms to record high, Bengaluru leads: Report

Mumbai, Jan 3 India's office market has become a key hub for global companies expanding their workforce and real estate footprint in 2024, with the net absorption reaching a record 49.56 million sq. ft during the year, according to a report released by real estate firm JLL on Friday.

The year concluded with an exceptional fourth quarter (October-December 2024), marked by record net absorption figures of 18.53 million sq. ft, underscoring the robust growth in this sector.

Bengaluru confirmed its market-leading position with its best-ever net absorption at 14.74 million sq. ft in 2024 with an increase of 63.6 per cent over the previous year. The city also posted its best quarter and now accounts for a 36.1 per cent share in the country’s office lease market, according to the report.

Hyderabad jumped to the second spot with a 16.0 per cent share followed by Delhi NCR with 15.4 per cent and Chennai with 11.5 per cent share in the quarterly net absorption numbers.

For the full year (January-December 2024), Bengaluru led the charge with 2024 being its best year yet in net absorption terms while Mumbai also saw decadal high numbers. Strong annual performance across Delhi-NCR and Hyderabad also contributed to the continued growth momentum in the office market. These four cities accounted for 77.8 per cent share of the annual net absorption number in 2024, the report states.

Global Capability Centres (GCCs) and Flex had their best year to date with both combining for a 56 per cent share of the gross leasing numbers in 2024, the report highlighted.

“In 2024, India's office market shattered expectations, with leasing activity across the top seven cities reaching an unprecedented 77.22 million square feet -- a 22.6 per cent year-on-year increase, marking the highest annual leasing ever recorded. Global companies played a crucial role, driving 58.6 per cent of leasing activity, as India remains central to their real estate expansion plans. Global Capability Centres (GCCs) had a standout year, capturing 35.9 per cent of the market with approximately 28 million square feet leased. As India's position as the 'office to the world' strengthens, its focus on AI and emerging technologies, alongside engineering R&D capabilities, is expected to further propel demand, making it a key destination for headcount growth and innovation over the next decade," said JLL chief economist Samantak Das.

Q4 2024 turned out to be the best-performing quarter in terms of gross leasing at 23.80 million sq. ft, easily surpassing the previous peak recorded in the same period a year ago, by a factor of 13.6 per cent.

Source: IANS