The demand for office space in major Indian cities witnessed a major surge, with net leasing rising by 44 per cent annually in the first quarter of 2024, according to data released by real estate consultant Cushman & Wakefield (C&W).

During the period of January to March, net leasing of office space reached 11.5 million square feet, marking an increase from 8 million square feet in the corresponding period of the previous year. This surge in leasing activity reflects a robust appetite for office space among businesses, making it the third-highest level recorded in the last five years.

While Bengaluru, Mumbai, Delhi-NCR, and Chennai saw growth in net absorption, Pune, Hyderabad, Kolkata, and Ahmedabad witnessed a decline. However, despite variations across cities, the overall office market in India demonstrated strong momentum.

Anshul Jain, Chief Executive for India & Southeast Asia and Head of Asia Pacific Tenant Representation at C&W, noted that the Indian office market is experiencing a remarkable shift, with gross leasing exceeding 20 million square feet for two consecutive quarters—a trend not seen in recent history. This performance signifies a potential new standard for the market.

Gross leasing of office space across the eight cities studied rose by 33 percent to 20.13 million square feet in the first quarter of 2024, compared to 15.57 million square feet in the same period last year. Jain stressed that the surge indicates a surge in tenant interest in office space.

Mumbai witnessed a major increase in net office leasing, jumping more than three-fold, while Bengaluru saw a more than two-fold increase. Chennai also witnessed surge in net absorption, reflecting the growing demand for office space in these key cities.

Despite the overall positive trend, some cities saw a decline in net leasing. Kolkata saw an 82 percent drop, followed by Ahmedabad with a 53 percent decrease. Pune and Hyderabad also witnessed declines, albeit marginal.

The strong leasing activity in the Indian office market, driven primarily by fresh leasing, reflects the confidence in the market's growth prospects. With a balanced supply pipeline and continued tenant demand, further growth is anticipated in the coming quarters.

(With PTI inputs)