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Technology and flex space companies are fueling office space demand in India, as the second half of 2024 witnessed an 11 per cent year-on-year rise, according to the latest report by Colliers. The South Indian cities of Bengaluru and Hyderabad led the office market activity in the country during the second half of the year 2024, it said.
The consultancy firm's report added that supply in the second half followed the demand growth trajectory, registering a 7 per cent YoY rise. "Office demand is poised to solidify further in 2025, driven by the diversification of occupier base and increased space take-up by global capability centres," the report added. As per the 'Asia Pacific Office Market Insights H2 2024 and Outlook 2025' by Colliers, the significant increase in the Asia Pacific Region (APAC) office space demand will be driven by corporate expansion, return-to-office and the growth of global capability centres. In India, technology firms and flex space operators together accounted for 46 per cent of the total take-up across the top six cities during H2 2024, as per the report. New supply remained robust, with over 2.81 million sqm (30.3 million sq ft) of completions in H2 2024, a 7 per cent YoY growth across the top six cities, the report added. Bengaluru and Hyderabad led the office market activity during H2 2024, cumulatively driving more than half of India's Grade A space demand and supply. Amidst an uptick in both leasing activity and new supply, India vacancy levels largely remained stable at around 17 per cent. "Contrary to larger trends, India witnessed 7 per cent YoY growth in new supply, contributing 60 per cent of the new supply in APAC region during H2 2024. Looking ahead, we anticipate improved demand-supply dynamics in 2025, supported by balanced economic growth and likely moderation in inflation.", said Arpit Mehrotra, Managing Director, Office Services, Colliers India. According to Vimal Nadar, Senior Director & Head of Research, Colliers India, India remains one of the leading office markets in the APAC region, with over 70 per cent share in leasing and 60 per cent share in new supply in H2 2024. "Strong domestic leasing, coupled with increasing Grade A space uptake by Global Capability Centers (GCCs), continues to fuel office demand in India. During H2 2024, GCCs leased 1.4 million sqm (~15 million sq ft) of office space in India, accounting for over 40 per cent of the overall leasing during the period. Factors such as rental arbitrage, abundant talent, and language proficiency will continue to support the expansion of GCCs and outsourcing hubs in India." he said. (ANI)
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