New Delhi [India], April 4 : The flexible space operators in India has emerged as the second-largest sector in office leasing during the first quarter of 2024, accounting for a substantial 22% share in overall leasing activity across nine major cities. Total office leasing by flexible space operators reached 3.0 million sq. ft. in Jan-Mar '24, with Delhi-NCR, Chennai, and Bengaluru emerging as the top cities dominating flexible space absorption.
The findings have been revealed by the report titled 'CBRE India Office Figures Q1 2024' by CBRE South Asia Pvt. Ltd. The surge in activity by flexible office space operators shows the evolving dynamics of the Indian office leasing landscape.
While technology companies led with the highest share in leasing activity at 26%, flexible space operators closely followed with a significant 22% share. Other prominent sectors contributing to leasing activity included Engineering and Manufacturing (E&M) and Banking, Financial Services, and Insurance (BFSI) firms.
"Economic growth and strategic policies are fueling a dynamic transformation in India's office market, attracting a wider range of industries. While the technology sector continues to be the mainstay the broader demand is reflected in the leasing trends, with sectors such as BFSI and E&M exhibiting higher levels of activity", says Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India.
The report also indicates a consistent upward trend in the space leased by flexible space operators over the past five years, reflecting the growing demand for flexible workspace solutions in India. With the country being the fastest-growing flexible office market globally, the sector is poised for further growth driven by increasing demand across various segments, including large enterprises, start-ups, and Global Capability Centres (GCCs).
Furthermore, the report highlighted the dominance of domestic firms in quarterly leasing, accounting for 48% of the share in Jan-Mar '24. Technology companies, particularly in the software and services segment, played a significant role in driving leasing activity during the review period.
Global Capability Centres (GCCs) also continued to play a pivotal role in India's office leasing landscape, contributing to one-third of the overall leasing activity. Bangalore emerged as the leading city for GCC leasing, followed by Hyderabad and Delhi-NCR. India is poised to remain a prominent market for GCCs, aided by the size of engineering workforce available in the country, competitive costs, and an established ecosystem.
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