India's Office Leasing Hits Record High in H1 2024, Driven by GCCs and Flexible Workspaces

Office leasing in India's nine major cities rose 10 per cent to a record 45.5 million sq ft during January-June, driven by strong demand from multinational companies expanding Global Capability Centres and flexible workspace operators, according to CBRE. The gross leasing stood at 41.5 million sq ft in the year-ago period. Supply totalled 32 million sq ft, the highest ever recorded in the first half of a calendar year. "The sector recorded a historic absorption of 45.5 million square feet, the highest ever registered in any half-year period," CBRE said in its report.

GCCs, flexible workspaces drive demand

GCCs accounted for 43 per cent of all leasing in the first half, with the number of GCC deals jumping 30 per cent year-on-year. GCC leasing reached an all-time high of 10.3 million sq ft in the April-June quarter alone, up from 9.3 million sq ft in the preceding quarter. Flexible workspace operators emerged as the largest occupier segment in Q2, accounting for 27 per cent of total leasing activity. Leasing by co-working operators increased to 11.1 million sq ft from 7.7 million sq ft a year ago. Together, flexible workspace providers, technology companies and BFSI firms contributed nearly 62 per cent of leasing during the quarter and 58 per cent in the first half.

Record quarterly performance

The April-June period marked the strongest-ever quarterly performance, with gross leasing touching a record 24.6 million sq ft, up 18 per cent quarter-on-quarter and 14 per cent year-on-year. Developers simultaneously delivered an all-time high 21 million sq ft of new office space. Large office transactions also gathered pace, with deals exceeding 200,000 sq ft increasing 57 per cent quarter-on-quarter, led by flexible workspace operators and technology companies. Bengaluru, Hyderabad and Pune together accounted for 68 per cent of these large-format transactions.

Bengaluru leads, supply focuses on green-certified assets

Bengaluru retained its position as the country's largest office market, accounting for 27 per cent of leasing activity in Q2. Bengaluru, Pune and Delhi-NCR together contributed nearly 58 per cent of total leasing during the quarter. On the supply side, around 76 per cent of the office space completed during the quarter was green-certified, while 74 per cent was located within integrated technology parks. Bengaluru, Pune and Ahmedabad together contributed 73 per cent of new supply.

Outlook remains positive

"India's office market continues to demonstrate its structural depth and resilience, delivering back-to-back record quarters even as the world navigates a volatile geopolitical and economic backdrop," said Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & North Africa, CBRE. "We expect this momentum, anchored by strong fundamentals and sustained occupier confidence, to continue through the rest of 2026," he added. Ram Chandnani, Managing Director, Leasing Services, India, CBRE, said occupiers are prioritising quality, sustainability and flexibility. With investment-grade supply remaining tight relative to demand, he expects sustained rental appreciation across core micro-markets in the coming quarters.