Gross office space leasing up 31% in Jul-Sept across top 6 cities: Colliers

Demand for office space continues to be strong with gross leasing rising 31 per cent in July-September quarter across six major cities, according to Colliers India.

Real estate consultant Colliers India data showed that the gross office leasing rose to 17.3 million square feet in July-September from 13.2 million square feet in the year-ago period.

Bengaluru and Hyderabad accounted for over half of the leasing activity during this period.

Bengaluru registered its highest-ever leasing in any quarter at 6.3 million sq ft, up 85 per cent from 3.4 million square feet in the year-ago period.

In Pune, gross leasing rose to 2.6 million sq ft from 1 million square feet.

Office space leasing in Mumbai and Chennai remained flat at 1.7 million square feet and 1.4 million square feet, respectively.

Hyderabad witnessed a 16 per cent increase to 2.9 million square feet from 2.5 million square feet.

Office demand in Delhi-NCR fell 25 per cent to 2.4 million square feet in July-September 2024 from 3.2 million square feet in the corresponding period of the previous year.

Gross absorption does not include lease renewals, pre-commitments and deals where only a letter of intent has been signed.

According to Colliers, technology sector drove around one-fourth of the overall office space demand during the July-September quarter, followed by BFSI occupiers and flex space operators.

"Office demand across different markets and sectors has been impressive in the last 2-3 years, aiding overall leasing reach new highs each passing year. Interestingly, 2024 saw consecutive quarters of high growth in demand and supply," said Arpit Mehrotra, Managing Director, Office services, India at Colliers.

Office space demand in Bengaluru, Hyderabad and Mumbai have reached close to or surpassed 2023 demand levels in the first three quarters of 2024 itself, he added.

"Occupier confidence is reflected in continued higher uptake of large-sized deals of more than 1 lakh sq ft, accounting for 65 per cent of total leasing in Q3 2024," Mehrotra said.