Domestic firms expected to lease 65 million sq. ft in significant shift for Indian office market

The Indian office market is experiencing a significant shift, with domestic companies projected to lease 60-65 million square feet of office space between 2024 and 2025, as reported by CBRE. This marks a departure from the previous dominance of global corporations, particularly those from the United States. In the past 2 years, domestic firms have increased office space absorption by 60% compared to the pre-pandemic period of 2018-2019. These companies have accounted for nearly 47% of office leasing activity in the last decade, with Delhi-NCR, Bengaluru, and Mumbai leading in demand. Bengaluru and Hyderabad have seen increased occupancy from e-commerce and life sciences firms. At the same time, Mumbai holds a 43% share of domestic BFSI leasing.

Domestic technology firms are expanding their office footprints to meet rising demand for tech-driven solutions. Significant recent expansions include L&T Technology Services leasing 545,000 sq. ft in Bengaluru, LTI Mindtree leasing 1.2 million sq. ft in Bengaluru and Chennai, Smartworks leasing 700,000 sq. ft in Bengaluru, and IDFC leasing 500,000 sq. ft in Mumbai. The growth is supported by initiatives like the Make in India program and the Production Linked Incentive (PLI) Scheme, alongside increased profitability and a robust banking sector. The top 9 Indian cities are expected to add 185 million sq. ft of premium office space by 2026. Driven by flexible space operators, BFSI, and technology sectors, the office market saw a 14% YoY increase in leasing during the first half of 2024, reaching 32.8 million sq. ft.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.