India’s office market continued its impressive growth trajectory in the first half of 2024 (H1), registering its best performance ever. The sector witnessed strong leasing growth in H1 of 2024, with groundbreaking gross leasing volumes of at least 1 million square feet (msf) in all top seven cities — Mumbai, Delhi-NCR, Bengaluru, Chennai, Kolkata, Pune, and Hyderabad — as per a recent JLL report. Furthermore, H1 2024 (January to June) marked the best-ever first half, with leasing volumes at 33.5 msf, surpassing the previous highest H1 performance in 2019, the report added. This growth highlights the widespread strength of the Indian office market.
Bengaluru and Delhi-NCR, the leading cities, have been driving the market’s growth. Bengaluru, with a 33% share of the quarterly gross leasing, and Delhi-NCR, with a 20.7% share, have been consistently at the top, showcasing the maximum occupier activity. Their strong performance is a testament to the market’s potential and resilience.
“The unprecedented surge in the Indian office market during the first half underscores the dynamism of the commercial real estate sector. The robust leasing activity has renewed businesses’ confidence in the economy and generated more employment opportunities in the country. Driven by robust infrastructure development and favorable government policies, we envision a bright future for India’s office market, with more global and domestic companies looking to expand their footprint in India,” says Nisheeth Thukral, Head of Leasing, Ambience Group.
Also Read: ITR Filing: How to report capital gains while filing income tax return
“The leasing boom in H1 2024 showcases the adaptability and resilience of India’s commercial real estate sector. The rising demand for co-working spaces and flexible office solutions is a significant factor in this trend. In particular, Gurugram’s commercial real estate market is experiencing unmatched leasing activity, driven by its strategic location and world-class amenities. Developers are increasingly innovating to meet this rising demand for modern office spaces that prioritize sustainability, efficiency, and employee well-being. The surge in commercial leasing reflects Gurugram’s appeal as a preferred destination for businesses seeking high-quality environments that foster innovation and collaboration,” says Sandeep Chillar, Founder & Chairman, Landmark Group.
As per the report, the tech sector saw its strongest performance in two years, with its share of Q2 gross leasing at 31.5%. BFSI (Banking, Financial Services, and Insurance) also had a strong showing, accounting for a 20.3% share, followed by the manufacturing/engineering segment with a 17.3% share.
“The office leasing market in India is experiencing a remarkable upswing. This growth is driven by strong demand from the IT and financial sectors, showcasing the resilience and potential of the commercial real estate market. Notably, cities like Noida have emerged as a beacon of commercial real estate growth. The region has been seeing an upward trajectory in the price appreciation of commercial properties, leading to several major commercial operations in this location and inviting global investors. With Delhi-NCR showcasing a 20.7% share, we anticipate this momentum will continue through the year, and the demand for office spaces will sustain its progress,” says Harsh Gupta, CEO, Sundream Group.
Sanchit Bhutani, MD, Group 108, says, “Delhi NCR remains a key economic hub in India, driven by sectors such as information technology, finance, manufacturing, and services. As businesses expand and new enterprises emerge, the demand for commercial spaces, particularly office spaces, has surged, leading to upward pressure on rentals. Urbanisation and population growth in Delhi NCR have also fueled the demand for commercial real estate, including office spaces, retail outlets, and industrial facilities.”
As businesses continue to expand and new enterprises enter the market, the demand for office space is expected to sustain its upward trajectory. The significant uptake in leasing activity is a testament to the growing confidence among occupiers and the robust economic environment in India.