India Office Figures - Q2 2024

India’s office leasing activity remained robust in the second quarter of 2024, driven by continued expansionary decision-making by domestic corporates and Global Capability Centres (GCCs). Office occupiers in India are displaying an increased preference for an “office-first” approach, resulting in higher workplace utilisation rates and re-evaluation of leasing and portfolio strategies to accommodate their growth plans.

A strong quarterly performance also contributed to the second-highest H1 absorption on record at 32.8 million sq. ft. Below are a few notable trends observed during the past quarter:

·        The office leasing activity in India increased by 21% Q-o-Q to touch 18 million sq. ft. in Q2 2024. Bengaluru, followed by Pune and Chennai, accounted for a share of 57% in the overall transaction activity reported during the quarter. The absorption grew by 14% Y-o-Y to about 32.8 million sq. ft. in H1 2024.

·        New supply increased by 49% Q-o-Q and 11% Y-o-Y to reach 13.2 million sq. ft. in Q2 2024. Bengaluru, Mumbai, and Hyderabad led supply additions during the quarter, accounting for a cumulative share of 69%. In H1 2024, about 22.1 million sq. ft. of new completions were witnessed—a marginal decline of 3% Y-o-Y. However, we do expect a surge in development completions in H2 2024, which could further bolster transaction activity.

·        The technology sector made a comeback in 2024, with its share of transaction activity reviving as compared to 2023. Other sectors that contributed to this surge in leasing activity were banking & financial services, research, consulting & analytics, and flexible space operators.

·        During the second quarter, US-based multinationals became more active as they led quarterly absorption, accounting for a share of 39%. However, domestic firms dominated H1 2024 leasing with a share of 43%.

·        With a continued emphasis on sustainability from developers and occupiers alike, more than three-fourths of the newly completed office space during Q2 2024 was green certified.

·        Amidst rising average office utilisation rates in India, occupiers are likely to expand and solidify their presence further in H2 2024 to accommodate their growth plans.

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