India's Office Leasing Market Soars: Record 59.6 Million Sq. Ft Absorbed in Nine Months
India's office leasing market achieved a record absorption of 59.6 million square feet from January to September 2023, according to CBRE South Asia. Technology companies led the leasing activity, with Bengaluru, Mumbai, and Delhi-NCR capturing 61% of total absorption. Global Capability Centres (GCCs) represented 39% of total leasing. Office supply increased by 10% year-on-year to 41 million square feet. Bengaluru emerged as the frontrunner with 25% market share, followed by Mumbai and Delhi-NCR. The technology sector, flexible space operators, and financial services collectively accounted for 60% of the total demand.
*this image is generated using AI for illustrative purposes only.
India's commercial real estate sector has demonstrated remarkable resilience and growth, with office leasing reaching unprecedented levels in the first nine months of the year. According to a recent report by CBRE South Asia, the country's office leasing market achieved a record absorption of 59.6 million square feet from January to September.
Key Highlights
- Record absorption of 59.6 million square feet in office space from January to September
- Technology companies led the leasing activity
- Bengaluru, Mumbai, and Delhi-NCR captured 61% of total absorption
- Global Capability Centres (GCCs) represented 39% of total leasing
- Office supply increased by 10% year-on-year to 41 million square feet
City-wise Breakdown
| City | Absorption (Million Sq. Ft) | Market Share |
|---|---|---|
| Bengaluru | 15.10 | 25% |
| Mumbai | 10.60 | 18% |
| Delhi-NCR | 10.20 | 17% |
| Others | 23.70 | 40% |
Bengaluru emerged as the frontrunner in office space absorption, claiming a substantial 25% market share with 15.10 million square feet leased. Mumbai and Delhi-NCR followed closely, absorbing 10.60 million and 10.20 million square feet, respectively. These three cities collectively accounted for an impressive 61% of the total office space absorption in India during this period.
Sector-wise Demand
The technology sector continued to drive the office leasing market, with tech firms, flexible space operators, and financial services collectively accounting for 60% of the total demand. This trend underscores the ongoing digital transformation across industries and the growing importance of tech-enabled workspaces.
Global Capability Centres (GCCs)
GCCs played a significant role in the office leasing landscape, representing 39% of the total leasing activity. Bengaluru, Pune, and Delhi-NCR emerged as the preferred destinations for GCCs, accounting for 67% of all GCC-related leasing activity. CBRE expects GCCs to maintain a 35-40% share of total leasing in the future.
Supply Dynamics
The office supply witnessed a 10% year-on-year increase, reaching 41 million square feet. Pune, Bengaluru, and Delhi-NCR led this growth, collectively contributing to 66% of the new office space supply.
Future Outlook
The robust performance of India's office leasing market signals strong confidence in the country's economic growth and its position as a global business destination. As established players continue to favor large tech parks and new entrants leverage flexible spaces, the market is expected to maintain its momentum.
The record-breaking absorption levels, coupled with the increasing presence of GCCs and the dominance of the technology sector, paint a promising picture for India's commercial real estate sector. This growth not only reflects the country's economic resilience but also its ability to attract and retain global businesses, positioning India as a key player in the global office market.
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