The latest report by Colliers shows an 11% year-on-year increase in office space demand in India for the second half of 2024, attributed to technology and flex space companies. Bengaluru and Hyderabad are leading this growth, and supply has also grown by 7% year-on-year. The report suggests that demand will further strengthen in 2025, supported by corporate expansions and higher activity from global capability centres.
In a recent report by Colliers, it has been revealed that demand for office space in India surged by 11% year-on-year in the second half of 2024, largely driven by technology and flex space companies. The cities of Bengaluru and Hyderabad emerged as key players, dominating office market activity in the country during this period.
The report further indicated that the supply of office space also followed this upward trend, with a 7% year-on-year increase. Looking towards 2025, the firm expects office demand to further strengthen due to a diverse occupier base and greater space uptake by global capability centres (GCCs).
Colliers’ ‘Asia Pacific Office Market Insights H2 2024 and Outlook 2025’ highlights that the growth in office space demand across the Asia Pacific region is primarily attributed to corporate expansions, a return to office work, and the rise of GCCs. In India, technology firms and flex space operators constituted 46% of total office space take-up in the top six cities during this period.
Moreover, the report noted strong supply dynamics, with over 2.81 million sqm of new office space completed, reflecting a 7% increase year-on-year across the major urban centers. Bengaluru and Hyderabad collectively accounted for over 50% of India’s Grade A space demand and supply.
Despite heightened leasing activity and ample new supply, vacancy rates in India remained stable, hovering around 17%. Arpit Mehrotra, Managing Director of Office Services at Colliers India, emphasized that India exhibited a unique growth pattern, achieving a 7% year-on-year increase in new supply, representing 60% of the region’s overall new supply in H2 2024.
Vimal Nadar, Senior Director and Head of Research at Colliers India, remarked on India’s dominance in the APAC office market, claiming over 70% of the leasing market and 60% of new supply during the same period. He noted that strong domestic leasing and increased uptake of Grade A spaces by GCCs are pivotal to sustaining this demand.
In summary, the office space demand in India is notably driven by technology and flex space sectors, particularly in Bengaluru and Hyderabad. The consistent growth in both demand and supply signifies a thriving market, with an anticipated continuation of this trend into 2025. Factors such as increased leasing activity by global capability centres and stable vacancy rates further highlight India’s significant role in the Asia Pacific office landscape.
Original Source: www.livemint.com
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