Bull run in India’s real estate market is set to continue as the commercial real estate sector is currently experiencing a vigorous phase, demonstrating exceptional growth and resilience even amidst a global economic downturn. During the first half of 2024, the Indian office market is reported to have gone through the unprecedented surge, clocking its best performance ever that underlines the dynamism of India’s commercial real estate sector.
India’s office market, propelled by supportive government initiatives, accelerated infrastructure advancements, and a strong economic framework, is looking ahead with optimism as an increasing number of domestic firms and international corporations seek to expand their presence within the nation. Developers are geared up to meet the soaring demand for modern office spaces by their innovative approaches focused on sustainability and comfortability of employees.
Vipin Sharma, Founder & Chairman, Aarize Group, said the report indicating that GCCs (Global Capability Centers) will drive 40% of the demand for Grade A office spaces highlights a major opportunity for Delhi-NCR’s commercial real estate market, especially Gurgaon. “As one of the region’s most dynamic business centers, Gurgaon is witnessing robust demand from multinational companies in IT, finance, and global services. The proximity to Delhi, enhanced infrastructure, and international connectivity via the airport make it a prime destination. Developers in Delhi-NCR must focus on providing high-quality, sustainable office spaces to capitalize on this growing trend and meet the evolving needs of global corporations,” he added.
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According to a report titled ‘The Multifaceted Occupier Landscape of India Office Market’, publish by Colliers and RICS, the demand for office space in India will scale up between 2025 and 2027 with Global Capability Centres (GCCs) repositioned as hubs of knowledge and innovations, accounting for nearly 40 percent of the total demand in coming years. The report vividly ventilates that the dynamics of office space demand in the country has shifted from technology to diversified fields encompassing engineering, manufacturing, and BFSI (banking, financial services, and insurance) sectors.
Also, 30 percent of the domestic-origin demand may come from flex operators. Delhi-NCR could witness office space demand on an upward trajectory, the report suggests. Going forward, the swelling demand base augurs well for the commercial real estate as the office market has come out of the shadows of the Covid-induced economic meltdown.
Ashish Sharma, AVP-Operations, Brahma Group, said, “The expected 40% demand for Grade A office space from GCCs indicates positive growth in the real estate market in India. This trend provides developers the best opportunity to expand and develop Grade A office spaces to global standards. Furthermore, as GCCs and other sectors develop, there will be significant expansion not only in the major cities but also in new emerging markets. However, developers and investors will find great opportunities in providing sustainable and innovative spaces that align with evolving occupiers’ demands, thus enhancing the growth prospects in commercial real estate.”
Amid the office leasing boom in H1 2024 (January to June), as per the latest JLL report, the rising demand for co-working spaces is considered a significant factor in the upward swing of commercial real estate. The substantial increase in office leasing activities indicates growing confidence among occupiers and the strong fundamentals of India’s economy. Enterprise leasing in co-working spaces has become a strategic move for companies to drive business growth. With their collaborative atmosphere and innovative design, co-working spaces create a favorable environment to unlock new levels of growth and business opportunities. From an estimated market value of USD 2.15 billion in 2024, co-working spaces in India are projected to reach USD 3.04 billion by 2029, according to a Mordor Intelligence report. Post-pandemic, large conglomerates have increasingly turned their attention to flexible workspaces, recognizing their value and adaptability.
Parul Thakur, Business Head & Senior Vice President, COWRKS, said, “The rising demand for managed office spaces is transforming how corporates and enterprises approach their workplace strategies. As businesses increasingly prioritize flexibility, scalability, and collaboration, managed office solutions are providing the infrastructure and versatility required to thrive in today’s dynamic business environment. Flexible design elements and well-planned workspaces are now crucial to enhancing operational efficiency and driving sustainable growth. Global Capability Centres and large corporates, in particular, are leveraging these workspaces to foster innovation and expand their operational capabilities, highlighting the critical role of adaptable office environments in meeting evolving business needs.”
In Delhi-NCR, population growth, urbanization, world class infrastructure, huge job opportunities and headquarters of top notch domestic and global industries have fueled the demand for office spaces and commercial real estate. Growing contributions of domestic investors and capital flowing from a new class of investors like ultra-high-net-worth individuals have been significant to create a positive optics for the office space market. Industry leaders are optimistic about the trend, attributing the growth in leasing activity to improved business sentiment across diverse demand segments and a positive upturn in the domestic economy.