Office leasing across top 6 markets up 16% annually at 15.8 mn sq ft in Q2 2024; Mumbai and Bengaluru drive demand
Led by Bengaluru and Mumbai, office leasing across the top-6 markets registered a 16% year-on-year growth in the April-June period of 2024 at 15.8 mn sq ft
At 15.8 million square feet, office leasing in India grew 16% year-on-year across the top-6 markets during the April-June period of 2024. Mumbai and Bengaluru drove the office demand with 52% share, according to a new report released by property consultancy Colliers.
The six markets under review include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai and Pune.
As per the report, Bengaluru and Mumbai led demand during the second quarter of the 2024 calendar, collectively accounting for 52% of the overall leasing activity during the period.
Sectorally, technology and engineering and manufacturing drove 45% of the quarterly demand, the report said.
“A strong H1 performance has set the tone for office space demand to comfortably surpass 50 million square feet for the third consecutive time in 2024,” said Arpit Mehrotra, Managing Director, Office services, India, Colliers.
For the first half of 2024, total leasing in the office market stood at 29.4 million square feet, marking a 19% increase compared to the same period last year.
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Grade A new supply in Q2 2024
According to the report, fresh supply across the top-6 markets grew 6% year-on-year to 13.2 million square feet during the second quarter of 2024. In this, Mumbai led the trend with a 30% share, followed by Hyderabad at 27%.
“On account of few prominent projects receiving completion certificates in Mumbai, new supply in Q2 2024 stood at 4.0 million square feet, the highest incremental quarterly supply in the past 3-4 years,” the report highlighted.
With overall demand outpacing supply during the period under review, office vacancy levels hovered around 17%, the consultant said. Meanwhile, rentals increased on an annual basis, but remained largely stable on a sequential basis, it added.
Also read: Gross office leasing activity touches 15.16 mn sq ft in Q1 2024; tech remains sluggish
Highest-ever quarterly leasing in flex segment
The report highlighted that the flexible office space segment saw its highest ever quarterly demand in Q2 2024 at 2.6 million square feet, across the six geographies under review. Bengaluru and Delhi-NCR accounted for 65% of this demand, it added.
“Flex operators have already leased about 4.4 million square feet of space in H1 2024, underscoring the occupiers’ continued preference for flex spaces,” said Vimal Nadar, who is a senior director and head of research at Colliers India.