Office Leasing Outlook for India

Overview

The office market in India has reached a historic milestone in 2024, with total leasing activity across the top six cities surpassing 66.4 million square feet, reflecting a robust 14% year-on-year growth. Bengaluru was the driving force behind this growth, achieving its highest-ever leasing volume of 21.7 million square feet, marking a remarkable 40% increase in demand from the previous year.

Hyderabad and Mumbai also saw significant demand growth, with both cities leasing over 10 million square feet of Grade A office space in 2024—12.5 million and 10.0 million square feet, respectively. This is the first time both cities have reached double-digit leasing figures. Delhi-NCR also showed strong demand, with Grade A leasing nearly touching the 10 million square feet mark.

The overall demand in major cities has set new benchmarks for office leasing in India, signaling a healthy and dynamic office market.

Strong Q4 Boosts Record Leasing Activity

Leasing demand in 2024 was consistent throughout the year, with each quarter surpassing the previous one. The final quarter of 2024, in particular, saw the highest leasing activity of the year, with 19.7 million square feet leased, reflecting a 14% increase from Q3.

Bengaluru and Hyderabad were the leaders in Q4 leasing, contributing to 54% of the national leasing volume. Bengaluru recorded the highest quarterly leasing at 6.6 million square feet, while Mumbai and Hyderabad experienced the strongest quarter-over-quarter growth, with increases of 71% and 41%, respectively.

Flex Space Leasing Breaks Records

2024 was also a standout year for flex spaces. In Q4, flex space leasing reached a record high of 4.7 million square feet, representing 24% of the total Grade A space uptake during the quarter. The strong demand for flex spaces throughout the year led to an annual absorption of 12.5 million square feet, a 45% year-on-year increase.

Technology sectors continued to lead demand for office space, accounting for almost one-quarter of total leasing activity. However, flex spaces now represent almost one-fifth of the Grade A space uptake in 2024. The BFSI and engineering & manufacturing sectors also showed robust leasing activity, each crossing the 10 million square feet mark for the first time.

Large-sized deals (≥100,000 square feet) continued to dominate leasing, contributing 54% of total demand in 2024, with technology and flex space occupiers being the primary drivers.

Supply and Vacancy Trends in 2024

On the supply side, 2024 saw 53.3 million square feet of new office completions, a 6% increase from 2023. Bengaluru and Hyderabad were the largest contributors, accounting for 54% of the new supply. With demand outpacing supply across most cities, vacancy levels across India dropped by 80 basis points compared to the previous year.

Rental prices also increased by 5% on a year-over-year basis, driven by strong demand for both new and existing office spaces.

Conclusion

The office leasing market in India reached new heights in 2024, with Bengaluru leading the charge and Hyderabad and Mumbai showing remarkable growth. Flex space leasing was particularly strong, contributing to a record year. As demand continues to outpace supply, vacancy rates have declined, and rental rates have increased, signaling a positive outlook for the office market moving into 2025

Year Ender 2024: Top 5 Commercial Lease Deals in the Mumbai Real Estate Market

1. PREMIUM OFFICE SPACE LEASING IN SOUTH MUMBAI * Overview: Large multinational corporations (MNCs) continue to dominate the demand for premium office spaces in the central business district (CBD) of South Mumbai. * Notable Deal: A high-profile lease agreement with a leading tech company for over 100,000 sq. ft. of office space in a Grade A commercial tower. * Factors: Prime location, state-of-the-art amenities, and proximity to key transport links contribute to the high demand in this area. 2. THE RISE OF OFFICE LEASES IN LOWER PAREL * Overview: Lower Parel, which has evolved into a commercial hub, saw a significant increase in office space leasing. * Notable Deal: A major Indian financial institution secured 80,000 sq. ft. in a newly developed skyscraper, setting a record for leasing activity in the area. * Factors: Strategic location, modern infrastructure, and ease of access make Lower Parel a hot spot for corporates. 3. LEASING BOOM IN NAVI MUMBAI * Overview: With the expansion of the metro network and better connectivity, Navi Mumbai emerged as an attractive market for businesses looking for cost-effective spaces. * Notable Deal: A global e-commerce giant signed a 120,000 sq. ft. lease in a business park located near the proposed Navi Mumbai International Airport. * Factors: Affordability, improved transport infrastructure, and proximity to major hubs are key drivers. 4. TECH GIANTS AND CO-WORKING SPACE LEASES * Overview: The demand for co-working spaces continued to surge, with tech startups and SMEs leading the way. * Notable Deal: A top-tier co-working provider secured a 50,000 sq. ft. lease in the business district of Bandra-Kurla Complex (BKC) to accommodate the growing demand for flexible office solutions. * Factors: The shift towards hybrid work models and the need for collaborative spaces contributed to the growth in co-working leases. 5. RETAIL SPACE LEASING IN HIGH STREET LOCATIONS * Factors: Increased consumer spending, the return of tourists, and brand expansion led to robust demand in the retail sector. * Overview: Retail leasing remained strong, especially in high-street locations like Colaba, Linking Road, and the various malls in Andheri and Goregaon. * Notable Deal: A luxury brand leased 20,000 sq. ft. in one of the most sought-after commercial complexes in Colaba for their flagship store.

Shaping the Future of Office Environments

THE EVOLVING FUTURE OF WORK AND FLEXIBLE WORKSPACES Conversations about the future of work are driving companies to rethink business models in a post-COVID world. Businesses must innovate to adapt to shifts in consumer behavior, both short and long-term. Flexible workspaces are emerging as an ideal solution to facilitate this change. GROWTH OF FLEXIBLE WORKSPACES Before the pandemic, the flexible workspace sector was rapidly growing, with India becoming the second-largest market in the Asia-Pacific region. The segment saw consistent growth of 25-30% annually, with expansion reaching Tier 2 cities. Despite the disruption, businesses must continue focusing on productivity, while adhering to new norms like social distancing. Flexible workspaces offer businesses the adaptability needed in this evolving environment. CHALLENGES WITH WORK-FROM-HOME MODELS While many companies have embraced remote work to protect employees, challenges are emerging in terms of infrastructure and employee well-being. Poor internet connectivity, lack of services like meals and timely breaks, and the mental health impact of isolation are significant concerns. Flexible workspaces provide the services needed to boost productivity and maintain mental health, offering amenities such as gyms, meals, and collaborative spaces that support employees. THE LONG-TERM VIABILITY OF REMOTE WORKING Although remote work is currently popular, long-term adoption in India faces challenges, including infrastructure issues and utility costs like internet and electricity. Moreover, remote work can lead to mental fatigue, isolation, and increased stress, as seen with the rise of “Zoom fatigue.” Flexible workspaces, however, offer a more balanced solution by combining work and community while addressing these concerns. FLEXIBILITY IN REAL ESTATE AND COST MANAGEMENT Flexible workspaces allow businesses to shift real estate costs from fixed to variable expenses, providing financial flexibility. These spaces also offer scalability, enabling businesses to adapt to fluctuations in demand. As social distancing becomes standard, companies can mitigate health risks by operating from multiple locations. EMPLOYEE PREFERENCES AND PROXIMITY TO HOME The desire to work closer to home is growing, as employees seek a better work-life balance and proximity to family, especially in uncertain times. Flexible workspaces allow companies to set up smaller offices across different locations, reducing long commutes and improving employee satisfaction. COMMUNITY BUILDING IN FLEXIBLE WORKSPACES One of the key advantages of flexible workspaces is the strong sense of community they foster. Community managers play a crucial role in delivering great experiences, ensuring seamless communication, and providing reliable information, especially during a health crisis. This sense of belonging and support helps employees thrive both mentally and professionally. CONCLUSION: A NEW WAY OF WORKING As businesses adapt to changing needs, flexible workspaces are well-positioned to support the future of work. By offering agile real estate, fostering community, and prioritizing employee well-being, they provide a sustainable solution for businesses navigating the post-pandemic landscape. The practices and policies put in place today will pave the way for a new and dynamic workspace model moving forward.

Exploring the Benefits and Opportunities of Office Space for Rent in IT City Mohali

In today’s fast-paced business world, the need for a flexible and professional work environment has never been more crucial. Whether you’re a startup, a growing enterprise, or a large corporation, finding the right office space is vital to your company’s success. For businesses looking for prime locations with modern infrastructure, office space for rent in IT City Mohali stands out as an excellent option. This growing tech hub in Mohali, Punjab, offers an ideal setting for businesses to flourish, making it a sought-after destination for many companies in the IT sector and beyond. WHY CHOOSE OFFICE SPACE FOR RENT IN IT CITY MOHALI? The significance of choosing the right location for your office cannot be overstated. Mohali, often referred to as IT City, is rapidly becoming one of the most promising business hubs in northern India. Its strategic location, modern infrastructure, and thriving IT ecosystem make it a magnet for businesses of all sizes. Whether you are looking for a small office for rent or a large commercial space to accommodate a growing team, IT City Mohali offers an array of options tailored to your needs. 1. STRATEGIC LOCATION AND CONNECTIVITY IT City Mohali is strategically located near the Chandigarh International Airport, making it accessible to businesses from all over the country and abroad. The excellent road connectivity to Chandigarh and other neighboring cities ensures easy commutes for employees and clients. The well-developed infrastructure, including wide roads, modern buildings, and dedicated business districts, makes it a preferred choice for businesses. The presence of residential areas nearby also adds convenience for employees, as they have access to a wide range of housing options. This helps businesses attract and retain top talent, as employees do not have to endure long and stressful commutes. 2. AFFORDABLE OFFICE SPACE FOR RENT When compared to other metro cities like Delhi, Gurgaon, or Bangalore, office space for rent in IT City Mohali is relatively more affordable. This cost-effectiveness makes it an attractive choice for startups and small businesses that are working within a tight budget but still require modern office amenities. Renting office space in IT City Mohali allows businesses to save on operational costs while still being part of a vibrant and growing business community. 3. STATE-OF-THE-ART INFRASTRUCTURE IT City Mohali is equipped with state-of-the-art infrastructure, designed to support modern businesses. The office buildings in this area are constructed with the latest technology, offering high-speed internet connectivity, power backup, air conditioning, and ample parking facilities. Many of these office spaces are built in compliance with international standards, ensuring that your business operates in a world-class environment. Moreover, the presence of tech parks and coworking spaces within IT City Mohali gives businesses access to cutting-edge facilities and shared resources. This can help organizations reduce overhead costs while still gaining access to premium office amenities. 4. PROXIMITY TO IT AND TECH COMPANIES One of the major advantages of renting office space in IT City Mohali is its proximity to a large number of IT companies, startups, and tech hubs. The area is home to several global and national tech companies, providing ample networking and collaboration opportunities for businesses operating in the IT sector. Being surrounded by like-minded businesses and professionals fosters an environment of innovation and growth, which is crucial for any business looking to stay competitive in the fast-changing tech landscape. Moreover, the availability of talent is another key factor driving the demand for office for rent in IT City Mohali. With numerous educational institutions in and around the region, businesses have access to a large pool of skilled professionals. This makes it easier to build a strong and capable workforce, contributing to the long-term success of your company. 5. FLEXIBLE OFFICE SPACE OPTIONS One of the key benefits of renting office space in IT City Mohali is the wide range of flexible office space options available. Whether you’re looking for a small office for a few employees or a large office space to accommodate a growing team, you can find an option that fits your requirements. Additionally, many office spaces in IT City Mohali offer customizable layouts, allowing businesses to design the office according to their specific needs. From traditional offices to coworking spaces and serviced offices, the diversity of options ensures that businesses can choose the type of space that best suits their operations and culture. 6. SUPPORTIVE BUSINESS ECOSYSTEM Another reason businesses are drawn to IT City Mohali is the supportive business ecosystem it offers. The area is home to various business incubators, accelerators, and networking events that help businesses grow and thrive. Entrepreneurs can benefit from the mentorship and resources available in these ecosystems, which can significantly reduce the challenges associated with starting and scaling a business. The proximity of various government and private sector organizations focused on the growth of the IT and tech industries further strengthens the appeal of renting office space in IT City Mohali. These organizations often offer grants, incentives, and networking opportunities that can help businesses expand and reach new heights. 7. HIGH RETURN ON INVESTMENT (ROI) Investing in office space for rent in IT City Mohali offers businesses a high return on investment (ROI). As the demand for office space in the area continues to rise, renting office space here can offer long-term benefits. Whether you’re looking to build a strong brand presence, network with industry leaders, or access a large pool of talent, the opportunities in IT City Mohali are endless. Additionally, the area’s rapid growth and development ensure that office spaces in IT City Mohali are likely to appreciate in value over time. Businesses that choose to rent office space in this area are positioning themselves for future success, both in terms of infrastructure and potential financial growth. FACTORS TO CONSIDER WHEN RENTING OFFICE SPACE IN IT CITY MOHALI While the benefits of renting office space in IT City Mohali are clear, there are several factors to consider before making a decision. These include: * Budget: Make sure to evaluate your budget and choose an office space that fits within your financial capacity. IT City Mohali offers a range of options, so it’s important to balance affordability with the quality and amenities you require. * Size and Layout: Consider the size of the office you need and whether the layout suits your business needs. You want to ensure that there is enough space for your current team and future growth. * Lease Terms: Carefully review the lease terms, including the duration, rent escalations, and any additional costs such as maintenance or utilities. It is important to understand the terms before committing to a contract. * Accessibility and Infrastructure: Consider the accessibility of the office location for both employees and clients. Check if the office space is well-connected with public transportation and if there are necessary amenities nearby. CONCLUSION In conclusion, office space for office for rent in the city mohali offers numerous advantages for businesses looking for a cost-effective and strategic location to operate from. With modern infrastructure, a growing business ecosystem, and proximity to a thriving IT industry, renting office space in this region can be a game-changer for businesses of all sizes. Whether you’re a startup or an established company, IT City Mohali provides a dynamic environment that supports growth, innovation, and success.

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Office Leasing Outlook for India