Representative image of an office space.
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New Delhi: Net leasing of office space rose 44 per cent annually in this quarter across eight major cities on higher demand from corporates for expansion of their businesses, according to Cushman & Wakefield.
According to data released on Saturday by real estate consultant Cushman & Wakefield (C&W) India, the net leasing of office space stood at 115.14 lakh (11.5 million) square feet (sq ft) during January-March as against 80.09 lakh (8 million) sq ft in the year-ago period.
"This is the third-highest level recorded in the last five years, demonstrating a robust appetite for office space among businesses," the consultant highlighted.
Net absorption or leasing rose in Bengaluru, Mumbai, Delhi-NCR and Chennai but fell in Pune, Hyderabad, Kolkata and Ahmedabad.
"The Indian office market is experiencing a robust momentum. We haven't witnessed 20 million square feet of gross leasing being recorded for two consecutive quarters in recent history.
"This strong performance may signal a shift and has the potential to become the new standard for the Indian market," Anshul Jain, Chief Executive, India & Southeast Asia and Head of Asia Pacific Tenant Representation at C&W, said.
Gross leasing of office space across eight cities rose 33 per cent to 201.31 lakh (20.13 million) sq ft in January-March from 151.57 lakh sq ft in the corresponding period of the previous year.
The strong leasing signifies a surge in tenant interest in office space, he added.
"As witnessed in the previous quarters, the impressive surge in office demand is primarily driven by fresh leasing. We are confident that a balanced supply pipeline and continued tenant demand will propel further growth in the Indian office market," Jain said.
Among cities, Mumbai witnessed a more than three-fold jump in net office leasing to 24,69,912 sq ft from 7,23,735 sq ft.
In Bengaluru, the net absorption of office space jumped more than two times to 35,98,732 sq ft from 15,65,599 sq ft.
Net office space leasing in Chennai surged 77 per cent to 8,75,783 sq ft from 4,95,886 sq ft.
Delhi-NCR saw a modest growth of 18 per cent in net leasing to 14,51,214 sq ft from 12,34,254 sq ft.
However, the demand for net leasing fell in Pune, Hyderabad, Kolkata and Ahmedabad.
In Kolkata, the net leasing fell 82 per cent to 1 lakh sq ft from 5.51 lakh sq ft.
Ahmedabad saw a 53 per cent fall in net leasing to 1,08,551 sq ft from 2,32,733 sq ft.
In Pune, the net office leasing fell 17 per cent to 13,04,107 sq ft from 15,65,754 sq ft.
The net office space leasing in Hyderabad declined marginally by 2 per cent to 16,05,953 sq ft during January-March 2024 from 16,40,242 sq ft in the year-ago period.
Gross leasing of office space means all leasing activity in the market, including renewals of contracted term by corporates.
Net absorption or leasing means new space occupied, adjusted for exits, if any.
Nikhil Madan, co-founder of coworking operator The Office Pass, said, "Similar to the previous quarters, we continued witnessing the robust demand for our flex space solutions in Q1 of 2024 as well."
As more and more companies pushing for work from office or hybrid working for their employees, the enquiries for spaces are constantly on rise, he said.
"Owing to this strong demand, we added two more coworking offices at Golf Course Road, Gurugram in this quarter and looking to add another 25,000-30,000 sq ft in couple of months to remain the front-runner in the highest number of coworking offices in Delhi NCR," Madan said.