The demand for large office spaces in India has seen substantial growth in recent times, with transactions for spaces above 100,000 sq ft increasing by 54 per cent year-on-year in the first half of 2024, according to a report by Knight Frank India. The report highlighted that large office spaces contributed 45 per cent of the total commercial transactions across eight major cities, indicating a notable uptick in commercial real estate activity in the country. Bengaluru led the charge in large office space leasing, with 4.5 million sq ft transacted in H1 2024, representing a significant 32 per cent year-on-year increase.
Following Bengaluru, Hyderabad and Mumbai ranked second and third in large office space transactions, with 3.08 million sq ft and 2.66 million sq ft, respectively. The report also noted a strong performance in the mid-segment office space leasing category, which includes spaces ranging from 50k to 100k sq ft, growing by an impressive 70 per cent year-on-year in H1 2024 to reach 7.28 million sq ft. Mumbai and the National Capital Region (NCR) led the way in mid-segment office space transactions, each recording 1.57 million sq ft of leased space.
Small office spaces, those below 50k sq ft, witnessed a more moderate growth, with transactions totaling 11.7 million sq ft, a slight 0.08 per cent year-on-year increase. NCR, Pune, and Chennai saw the highest activity in this segment, with transactions of 2.22 million sq ft, 1.78 million sq ft, and 1.6 million sq ft, respectively. The report also highlighted that Bengaluru remains the most attractive office market for large occupiers looking to expand their Indian operations, driven by corporations establishing Global Capability Centres (GCCs) and increasing need for flexible office solutions across various sectors.
The rise in demand for large office spaces is seen as a positive indicator for future growth in India’s commercial real estate sector, fueled by the expansion of global corporations and the establishment of GCCs. The increasing need for flexible office solutions across sectors is also contributing to the rise in office space transactions. With Bengaluru leading the charge in large office space leasing and mid-segment office space transactions witnessing strong growth, the report paints a promising picture for the commercial real estate market in India.
Overall, the commercial real estate sector in India is experiencing significant activity in terms of office space transactions, with large office spaces, mid-segment spaces, and small office spaces all seeing varying degrees of growth. The report by Knight Frank India highlights the performance of major cities like Bengaluru, Hyderabad, and Mumbai in large office space transactions and mid-segment office space leasing, indicating a positive trend for the future. As corporations continue to expand their operations in India and the need for flexible office solutions grows, the demand for office spaces is expected to remain strong in the coming years.
