January–March office space demand is expected to increase by 35% in 6 cities, with a two-fold increase in Hyderabad: Colliers

NEW DELHI: According to Colliers India, the demand for office space in six major cities is still high, with gross leasing of workspaces expected to increase by 35% annually in the January–March quarter. Nine days before the current quarter ends, real estate consultancy Colliers India revealed office market statistics for the January–March period.

The research indicates that during the first quarter of 2024, the total gross leasing of office space across six major cities—Bengaluru, Delhi-NCR, Mumbai, Chennai, Hyderabad, and Pune—is expected to increase to 13.6 million square feet.
In the same time frame last year, the lease totaled 10.1 million square feet (sq ft).
Hyderabad, Mumbai, Bengaluru, and Delhi-NCR are expected to see increases in demand, while Chennai may see a decline.
The demand in Pune is probably going to stay around 0.8 million square feet.
The data indicates that the amount of office space leased in Hyderabad is expected to increase by more than two times, from 1.3 million square feet in the same period last year to 2.9 million square feet during January–March.
It is anticipated that demand in Mumbai will increase by 90% to 1.9 million square feet from 1 million square feet.
Bengaluru’s office space leasing market is expected to grow by 25% to 4 million square feet from 3.2 million square feet.
Demand in Delhi-NCR is predicted to increase by 14% to 2.5 million square feet from 2.2 million square feet.
Chennai’s office demand is predicted to decline by 6% to 1.5 million square feet from 1.6 million square feet in January to March of this year.
Leasing data, including gross absorption, excludes lease renewals, pre-commitments, and transactions for which just a letter of intent has been executed.
Colliers India responded to a question on the rationale behind the data release, saying that it “considers only closed transactions while accounting for the gross absorption (leasing) numbers.” Due to the fact that there are only three working days remaining in the quarter this coming week, larger and more significant agreements are anticipated to be concluded.
Arpit Mehrotra, Managing Director-Office Services, Colliers India, commented on the trend, stating that Hyderabad is still a leading commercial office market in the nation.
“The city offers occupiers, including Global Capability Centres, considerable price arbitrage compared to other markets,” he said.
Mehrotra pointed out that Hyderabad is a desirable location for investors, occupiers, and top real estate developers due to the city’s policies, ongoing infrastructural improvements, and supportive business environment.
According to Vimal Nadar, Senior Director and Head of Research at Colliers India, in Q1, occupiers in the technology, engineering and manufacturing, and BFSI sectors accounted for 58% of all leasing activity in the top 6 cities.
Regarding the office market, co-founder and CEO of Urban Vault, Amal Mishra, said that the availability of competent personnel, affordable real estate, and rapid economic expansion are the main drivers of the strong demand for offices from both local and international businesses in key cities.
Based in Bengaluru, Mishra has many locations. “The demand for flexible workspace, including managed office space, is also growing,” she said.