India's large office space transactions surge by 54 pc YoY in first half of 2024 - Knight Frank
Sep 13, 2024
New Delhi [India], September 13 : The demand for large office spaces has seen significant growth in India, with transactions for office spaces above 100,000 sq ft increasing by 54 per cent year-on-year (YoY) in the first half of 2024 (H1 2024), according to a recent report by Knight Frank India, a property consultancy firm.
The report also revealed that large office spaces contributed 45 per cent in first half of 2024, of the total commercial transactions across eight major cities, marking a notable uptick in commercial real estate activity in the country.
In terms of city-wise performance, the report highlighted that Bengaluru led the charge in large office space leasing, with 4.5 million sq ft transacted in H1 2024. This represents a substantial 32 per cent YoY increase from the 3.4 million sq ft recorded in H1 2023.
"Bengaluru's commercial market continued to witness leasing domination in office spaces with 100,000 sq ft. In H1 2024, large office spaces contributed 53 per cent to Bengaluru's total office transaction volumes, amounting to 4.5 million sq ft." said the report.
As per the report, Hyderabad and Mumbai followed, ranking second and third in large office space transactions, with 3.08 million sq ft and 2.66 million sq ft, respectively.
The report also added that a strong performance in the mid-segment office space leasing category, which includes spaces ranging from 50k to 100k sq ft. Leasing activity in this segment grew by an impressive 70 per cent YoY in H1 2024, reaching 7.28 million sq ft.
In cities Mumbai and the National Capital Region (NCR) led the way in mid-segment office space transactions, each recording 1.57 million sq ft of leased space. Hyderabad followed closely, with 1.29 million sq ft of mid-sized office spaces being transacted during the same period.
Meanwhile as per the report, small office spaces--those below 50k sq ft--witnessed a more moderate growth, with transactions totaling 11.7 million sq ft, a slight 0.08 per cent YoY increase. NCR, Pune, and Chennai saw the highest activity in this segment, with transactions of 2.22 million sq ft, 1.78 million sq ft, and 1.6 million sq ft, respectively.
"Bengaluru remains the most attractive office market for large occupiers looking to expand their Indian operations. The rise in office space transactions is primarily fuelled by corporations establishing Global Capability Centres (GCCs) to expand their long-term operations in the market" said Shishir Baijal, Chairman and Managing Director, Knight Frank.
The rise in demand is seen as a positive indicator for future growth, driven by the expansion of global corporations, the establishment of GCCs, and the increasing need for flexible office solutions across various sectors.
