Cushman & Wakefield: Total office space leasing volume will grow 14% in 2024, reaching a record 85 million square feet

New Delhi, Dec 16 (PTI) Total leasing of office space in eight major cities is likely to grow by 14 per cent this year to a record 85 million sq ft, according to Cushman & Wakefield.

In 2023, total office space leasing reached 74.6 million sq. ft. in eight cities including Bengaluru, Hyderabad, Mumbai, Delhi-NCR, Chennai, Pune, Kolkata and Ahmedabad.

“Gross leasing volume (GLV) of office real estate in India’s top 8 cities has been above 70 million sq. ft. since 2022. In 2024, gross leasing volume of office real estate is likely to reach an all-time high of 83-85 million sq. ft. GLV ,” the consultant said in its annual summary.

Between January and September 2024, total leasing area has reached 66.7 million square feet.

Office leasing space was 49.1 million square feet in 2018; 67.7 million square feet in 2019; 46.6 million square feet in 2020; 50.4 million square feet in 2021; 72 million square feet in 2022; and will reach 74.6 million square feet in 2023 .

The consultant said the growth was driven by healthy numbers in IT-BPM, BFSI, Engineering & Manufacturing and Agile Operator segments as these were the top performing segments.

“New space leasing, an indicator of growing business activity in India, has been the largest contributor to GLV. For the full year 2024, new leasing is likely to account for nearly 70%, from newly entered GCCs (Global Competence Centers) and expansion of domestic corporate operations,” Cushman & Wakefield said.

Veera Babu, Managing Director, Tenant Representation, Cushman & Wakefield, said: “2024 is set to be a record-breaking year for the Indian office sector, with gross leasing volumes expected to reach approximately 85 million sq ft and net absorption of approximately 45 million sq ft – India Record highest ever for commercial real estate.”

He added that the GCC is likely to contribute nearly 30% of total office space leasing.

The consultant said it expects a surge in leasing volumes in top assets in 2024 and 2025, putting upward pressure on rents in key micro markets.

“Most of the new supply in 2025 is concentrated in key micro markets, suggesting that overall rents are likely to rise. However, as supply continues to pour in, increases are expected to be modest, helping tenants – and the good market sentiment is set to continue for some time time,” Cushman & Wakefield said.