Mumbai (Maharashtra) [India], October 3 : Office space transactions in India surged to a record 19 million square feet (mn sq ft) in Q3 2024, marking the highest quarterly absorption since Q1 2018, according to Knight Frank India's report.
Office space transactions marks record in Q3 2024
Global Capability Centers (GCCs) were the top contributors, accounting for 7.1 mn sq ft, or 37 per cent, of the transacted volume in Q3 2024. India-facing businesses followed closely, taking up 6.6 mn sq ft, reflecting the growing confidence in the Indian economy.
Bengaluru emerged as the leader in office transactions, recording 5.3 mn sq ft of leasing in Q3 2024, constituting 28 per cent of the total volume across eight cities.
The city witnessed 158 per cent YoY growth in office space transactions. Other notable markets include NCR and Chennai, which grew by 26 per cent and 35 per cent YoY, respectively.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, noted, "We expect this trend to continue for the rest of the year, with the possibility of office leasing numbers crossing 70 million sq ft by the end of 2024an astounding 10 million sq ft increase, or a 20 per cent growth over the previous high. This exceptional growth underscores India's position as a thriving global business hub."
Bengaluru's leasing transactions surged to 5.3 mn sq ft from 2.1 mn sq ft in Q3 2023. NCR followed with 3.2 mn sq ft, while Chennai saw 2.6 mn sq ft of office space leased.
Despite robust performance in key cities, some, like Hyderabad and Pune, saw declines in transaction volumes.
While office transactions flourished, completions remained flat, with 11.5 mn sq ft of office space completed in Q3 2024, unchanged from the same period last year. However, Pune stood out, recording a 531 per cent YoY surge in completions.
Rental values continued to show steady growth, with Bengaluru rents rising by 7 per cent YoY, while Chennai led with a 10 per cent YoY increase. This marks the ninth consecutive quarter of rental stability or growth, reflecting healthy demand and increasing occupier focus on wellness and ESG compliance.
Viral Desai, Senior Executive Director at Knight Frank India, remarked, "As more companies bring employees back to the office, either partially or fully, demand for office space is strengthening over the last few quarters."
He added, "Rental growth across key markets remains healthy, supporting by sustained volume growth. The momentum in development activity is building up as well with occupier Wellness and ESG compliance gaining increasing focus."
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