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India's office leasing across nine major cities fell 2.5 per cent in the July-September quarter to 19.9 million square feet, mainly due to lower demand in southern markets. Bengaluru, Hyderabad, and Chennai experienced significant declines, while Delhi-NCR, Mumbai, and Pune recorded notable growth. Kochi also showed improvement, and Kolkata remained stable. Fresh office space supply slightly dipped. The market's recovery since 2022 has been supported by foreign firms establishing Global Capability Centers and rising interest in co-working spaces, reflecting shifting corporate leasing trends across regions.
Gross office leasing across nine major Indian cities declined by 2.5 per cent in the July-September quarter, reaching 19.9 million square feet, according to CBRE. In comparison, the same period last year recorded 20.4 million square feet. The overall dip reflects varied performance across regions, with South Indian cities experiencing weaker demand. Advertisement
Bengaluru saw a sharp drop in gross office leasing, falling to 4.3 million square feet from 7.2 million square feet in the previous year. Hyderabad also registered a decline, with leasing activities reducing to 2.2 million square feet from 2.6 million square feet. Chennai's office leasing dropped to 1.5 million square feet from 2.4 million square feet, highlighting continued softness in the southern market.
In contrast, northern and western cities recorded growth in office space absorption. Delhi-NCR's leasing increased to 3.8 million square feet from 2.4 million square feet, while Mumbai's demand rose to 4 million square feet from 2.9 million square feet. Pune also witnessed a significant rise to 3.2 million square feet from 1.9 million square feet. Kolkata's leasing remained stable at 0.6 million square feet. Ahmedabad experienced a decrease to 0.1 million square feet from 0.3 million square feet, whereas Kochi posted growth to 0.2 million square feet from 0.07 million square feet, reflecting positive traction in smaller markets.
CBRE's report further highlighted that fresh office space supply marginally declined to 13.6 million square feet during the quarter from 14 million square feet in the same period last year. The reduced supply, coupled with regional variations in leasing activity, points to an evolving office market adapting to demand patterns.
India's office market, severely impacted during the COVID-19 pandemic, has been steadily recovering since 2022, driven by increased demand from foreign firms setting up Global Capability Centers (GCCs). The past three years have also seen a rising preference for co-working spaces, indicating shifting workspace needs among both multinational and domestic companies. Analysts suggest that while some regions show slow absorption, others continue to attract strong leasing activity, reflecting a gradual and steady recovery across the country.
Source: PTI
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