Net office leasing rises to 18-month high of 10.37 mn sq ft in Jul-Sep: JLL

However, in the first nine months of 2023, the office space absorption was 13.9 per cent lower than in the same period last year

The net leasing of office space in the top seven cities in India increased by 5 per cent to 10.37 million square feet (msf) in July-September, despite global headwinds, according to real estate consultancy JLL India. In the same quarter last year, the net absorption of office space was 9.86 msf.

However, in the first nine months of FY24, the absorption of office space was 13.9 per cent lower compared to the same period last year.

According to the data, Hyderabad led with the highest market share of 26.1 per cent, followed by 22.9 per cent in Bengaluru and 16.4 per cent in Delhi-National Capital Region (NCR). In Bengaluru, the net leasing of office space rose to 2.38 msf in July-September, up from 1.71 msf in the year-on-year period.

Net leasing in Chennai increased to 0.9 msf from 0.54 msf. Delhi-NCR saw a rise to 1.7 msf from 1.61 msf. In Pune, the demand remained stable at 1.01 msf, while leasing in Kolkata rose marginally to 0.14 msf from 0.10 msf.

However, demand remained subdued in Mumbai and Bengaluru. Net office leasing in Hyderabad declined to 2.7 msf from 3.06 msf. Mumbai experienced a reduction in net leasing of office space to 1.53 msf during the third quarter of this calendar year, down from 1.83 msf in July-September of the previous year.

Rahul Arora, head of JLL India Head Office Leasing Advisory, stated, "India's office market performance in the third quarter (July-September) highlights the strong fundamentals of demand and the complete absence of any long-term effects of the global headwinds, except for delayed decision-making."

He further added that this strong leasing momentum is fuelled by India's technology ecosystem, experiencing robust offshoring and research and development across multiple sectors.

"Global Capability Centres (GCCs) accounted for a 44 per cent occupier share in the third quarter in terms of operations. This multi-year trend is anticipated to keep the Indian office markets among the most growth-oriented globally," Arora noted.

Samantak Das, chief economist and head of research and REIS, India, JLL, remarked, "With deal closures on track, we are likely to see the net absorption numbers meet the forecasts of 36-39 msf in 2023."