With global corporations expanding their long-term operations in India due to increasing opportunities, large occupiers are driving the office market, with Bengaluru emerging as a front-runner in leasing for large office spaces during H1 2024.
According to Knight Frank India, transactions for office spaces above 100,000 sq ft recorded a substantial YoY growth of 54% in the first half of calendar year 2024 (H1 2024) from 10.18 mn sq ft in H1 2023 to 15.69 mn sq ft in H1 2024. Large office space contributed 45% of the overall commercial transactions across eight leading cities in the country.
Bengaluru’s commercial market continued to witness leasing domination in office spaces with 100,000 sq ft. In H1 2024. Large office spaces contributed 53% to Bengaluru’s total office transaction volumes, amounting to 4.5 million sq ft. This represents a significant 32% YoY increase from 3.4 mn sq ft during H1 2023. Hyderabad and Mumbai ranked second and third in large office space transactions, with 3.08 mn sq ft and 2.66 mn sq ft, respectively.
Share of area transacted across size categories in H1 2024
| Cities | Transaction (in mn sq ft) |
Office Space Categories | ||||
| (Share of total Transactions in %) | ||||||
| <50k | >=50k<=100k | >100k | <50k sq ft | >=50k<=100k sq ft | >100k sq ft | |
| Ahmedabad | 0.73 | 0.28 | 0.65 | 44% | 17% | 39% |
| Bengaluru | 2 | 1.19 | 4.5 | 32% | 14% | 53% |
| Chennai | 1.6 | 0.46 | 0.97 | 53% | 15% | 32% |
| Hyderabad | 0.67 | 1.29 | 3.08 | 13% | 26% | 61% |
| Kolkata | 0.4 | 0.16 | 0.14 | 58% | 23% | 19% |
| Mumbai | 1.56 | 1.57 | 2.66 | 27% | 27% | 46% |
| NCR | 2.22 | 1.57 | 1.87 | 39% | 28% | 33% |
| Pune | 1.78 | 0.77 | 1.82 | 41% | 18% | 42% |
| All cities | 11.7 | 7.28 | 15.69 | 34% | 21% | 45% |
| Source: Knight Frank Research | ||||||
Office space leasing in mid segment or spaces between 50,000 sq ft to 100,000 sq ft was recorded at 7.28 mn sq ft witnessing a growth of 70% YoY in H1 2024. Mumbai and NCR witnessed highest transactions in the mid-office space segment at 1.57 mn sq ft each, followed by Hyderabad at 1.29 mn sq ft.
Office space leasing in small office spaces or spaces below 50,000 sq ft were recorded at 11.7 mn sq ft witnessing a moderate growth of 0.08% YoY in H1 2024.NCR, Pune and Chennai witnessed the highest traction for offices in small office spaces or spaces in the category below 50,000 sq ft at 2.22 mn sq ft, 1.78 mn sq ft and 1.6 mn sq ft respectively.
According to Shishir Baijal, Chairman and Managing Director, Knight Frank India, Bengaluru remains the most attractive office market for large occupiers looking to expand their Indian operations. The rise in office space transactions is primarily fuelled by corporations establishing Global Capability Centres (GCCs) to expand their long-term operations in the market. Flexible workspaces remain vital, providing adaptability and cost savings for sectors such as third-party IT services and startups.
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