Indian Economy News

Pan India Office Market has recorded healthy leasing in Q2 of 2023 owing to positive demand

According to a recent report by Cushman & Wakefield, the office sector recorded a total lease of about 17.4 million square feet (msf) on a pan-India level in the second quarter (Q2) of 2023, registering an 11% increase from the previous quarter.

As per the report, the office real estate market is still seeing strong demand, with a half-yearly gross lease volume of 33.1 msf, or 46% of the full-year volume recorded in 2022, which was a record high.

According to Mr. Anshul Jain, Head of APAC Tenant Representation and Managing Director, India & South-East Asia, “India’s office real estate market continues with its growth momentum. The entry of new Gulf Cooperation Countries (GCCs) and the ongoing expansion of the manufacturing and flex space segments are also helping the office sector widen its demand base.”

The report reported that Delhi-NCR had the greatest leasing volume, at 3.6 msf, which is a 24.8% increase over Q1 2023 volumes. Healthy leasing volumes of 3.0 msf and 3.0 msf were recorded in Bengaluru and Pune. The total leasing volume in Hyderabad, increased by 61.7% quarter-over-quarter (Q-o-Q), reaching 2.6 msf.

The largest contributor is the IT-BPM industry, accounting for 31% of all leasing volumes, or over 5.3 msf. The report also emphasised that the flexible space has a unique role to play as an emergent asset class. This category once again made up 13-14% of India's gross leasing value (GLV) in the first half (H1) of 2023. The other big contributors are sectors like BFSI (2.5 msf), Engineering & Manufacturing (3.3 msf), and Flexible Workspaces (2.3 msf).

In Q2 of this year, Grade A office space inventories totalled 696.7 msf, witnessing a 6.25% increase over the same period the previous year.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.