India's office space leasing market is projected to reach a record high of approximately 70 million sq. ft in 2024, as per the latest report from real estate consultancy CBRE. This would surpass the previous peak of 66.6 million sq. ft achieved in 2019, underscoring the resilience and growth potential of India’s office leasing sector. The report, titled "CBRE India Office Figures Third Quarter of 2024", highlights that the office sector witnessed gross leasing of 53.8 million sq. ft between January and September 2024, representing a 19% increase compared to the same period last year.

According to Mr. Anshuman Magazine, Chairman and CEO for India, South-East Asia, Middle East & Africa at CBRE, this robust growth in office leasing is driven by both global and domestic occupiers. These occupiers are expanding their operations and consolidating their facilities, with the goal of strengthening their market presence in India's burgeoning office sector.

The report provides a detailed sector-wise breakdown of office leasing trends. Technology companies emerged as the largest contributor, accounting for 23% of the total office leasing in the first three quarters of 2024. This trend is expected to continue, with the technology sector anticipated to hold a 25-30% share of total leasing for the year. Flexible space operators, such as coworking spaces, followed closely behind, with a 19% share of total leasing activity, while banking, financial services, and insurance (BFSI) firms accounted for 16%.

The July-September quarter of 2024 recorded the highest office leasing activity for the year, with 19 million sq. ft of space leased. During this period, technology companies maintained a 19% share of the total leasing, while BFSI firms contributed 18%, and flexible space operators accounted for 17%. This significant leasing activity is a testament to the ongoing demand for office space, particularly from sectors that are pivotal to India's economic growth.

As per CBRE, the demand for office space is expected to broaden in 2024, with continued growth from BFSI firms, flexible space operators, and entertainment & media companies. The report also points out the increasing contribution of Global Capability Centres (GCCs) to the overall office leasing market. GCCs are projected to account for 35-40% of total office leasing in 2024, driven by the expansion of global companies seeking to establish or grow their presence in India.

The July-September quarter of 2024 saw GCCs contribute to 44% of total office leasing activity. Among the sectors contributing to this growth were BFSI firms, e-commerce companies, and technology corporates, which together represented approximately 58% of total leasing activity within GCCs during this period. This highlights the importance of GCCs in driving demand for Grade A office spaces across key Indian cities.

Additionally, sectors such as life sciences, FMCG & retail, and entertainment & media have actively established GCCs in the past quarter, reflecting the diverse range of industries that are contributing to the office leasing boom. Pune emerged as a key city, with particularly strong demand for Grade A office space, showcasing the potential for further office space development in regions outside traditional hubs like Mumbai and Delhi.

As investments in new manufacturing units rise, combined with the growth of e-commerce and the expansion of GCCs, the office leasing sector is set to maintain its upward trajectory, positioning India as a leading player in the global real estate market. The competitive advantages of low wages, technological advancements, and improved ease of doing business are expected to fuel further demand, pushing the total office stock in India toward 300 million sq. ft by 2025.

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