Driven by massive demand from technology and BFSI firms, the country’s grade-A office leasing market reported a significant jump in absorption during the September quarter. Latest data from Colliers India shows that the absorption of grade-A office spaces rose by 31% year-on-year during the last three months, reaching 17.3 million sq. ft., up from 13.2 million sq. ft. (msf) in the same quarter of the previous year.
In fact, leasing activities in 2024 have been robust. Between January and September 2024, nearly 47 msf of grade-A office space has been leased by leading companies, a figure that is 23% higher than the 38 msf leased in the first nine months of 2023.
Among the sectors leasing grade-A space, technology remained at the forefront with 4.5 msf leased in Q3 2024—25% higher than the same quarter last year—followed by BFSI companies, which together leased 3.8 msf of grade-A office space, marking a 138% year-on-year increase. Flex space operators leased 3.4 msf, capturing the third spot. Notably, healthcare and pharma companies increased their leasing activities the most, with a 341% year-on-year rise to 1.5 msf in Q3.
Bengaluru topped the list of markets, with 6.3 msf of grade-A office space leased during the last quarter, reflecting an 85% year-on-year growth. This was followed by Hyderabad (2.9 msf) and Delhi-NCR (2.4 msf), while Pune recorded the steepest growth at 160% year-on-year.
“Interestingly, Bengaluru and Pune surpassed Mumbai in BFSI leasing, accounting for 39% and 25% shares, respectively, of overall BFSI leasing during the quarter. Select micro-markets such as SBD 1 in Bengaluru, Golf Course Road in Delhi-NCR, CBD in Pune, and SBD in Hyderabad accounted for about 54% of the leasing by flex space operators in Q3 2024,” analysts at Colliers noted.
Meanwhile, new supplies surged by 33% year-on-year in Q3, reaching 14.4 msf.
“Office demand across different markets and sectors has been impressive in the last 2-3 years, aiding overall leasing to reach new highs each passing year. Interestingly, 2024 has seen consecutive quarters of high growth in both demand and supply. Office space demand in Bengaluru, Hyderabad, and Mumbai has reached close to or surpassed 2023 levels in the first three quarters of 2024. Occupier confidence is reflected in the continued uptake of large-sized deals of more than 100,000 sq. ft., which accounted for 65% of total leasing in Q3 2024. Bengaluru saw 81% of its leasing through large-sized deals, while Pune followed closely with 71%, driven by the tech and BFSI sectors,” says Arpit Mehrotra, Managing Director, Office Services, India, Colliers.
