Office space absorption increases 31% in September quarter: Colliers

Bengaluru, Hyderabad led the pack, driving over half of the quarterly space uptake in Q3 2024

The top six Indian cities witnessed a 31 per cent year-on-year (Y-o-Y) rise in Grade A office space demand, with leasing of 17.3 million square feet (msf) in the third quarter of the calendar year 2024 (Q3 2024), as per research by Colliers, a real estate advisory firm.

The top six cities are Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune.

Overall, in 2024 year to date (YTD), these cities absorbed 46.7 msf of office space, 23 per cent more than during the same period in 2023.

Arpit Mehrotra, managing director, office services, India, Colliers, said, “Office space demand in Bengaluru, Hyderabad, and Mumbai has reached close to or surpassed 2023 demand levels in the first three quarters of 2024. Occupier confidence is reflected in the 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. Bengaluru saw 81 per cent of its leasing through large-sized deals, while Pune followed closely with 71 per cent, driven by the tech and BFSI sectors.”

As per the research, the technology sector drove around one-fourth of the overall office space demand during the quarter, followed by banking, financial services, and insurance (BFSI) occupiers and flex space operators. Bengaluru and Pune surpassed Mumbai in BFSI leasing, accounting for 39 per cent and 25 per cent share, respectively.

Additionally, the six cities witnessed a new Grade A office supply of 14.4 msf in Q3 2024, with an annual increase of 33 per cent.