The top six cities in India are set to see a significant increase in office space leasing activity, with a projected total of 66.4 million square feet leased in 2024. This marks a robust 14% year-on-year growth in leasing activity, reflecting a strong demand for office space across major urban centers. Bengaluru will lead the way in this growth, achieving a record 21.7 million square feet of office space leasing, representing a 40% increase compared to the previous year. This will be Bengaluru's highest-ever leasing performance.
Hyderabad and Mumbai are also expected to experience significant growth, with leasing activity reaching 12.5 million and 10 million square feet, respectively. This will be the first time both cities see double-digit growth in office space demand, further contributing to the overall surge in leasing across India. According to a report from real estate consultant Colliers, the strong demand for Grade A office spaces has helped break records, with leasing activity across the six major cities registering 66.4 million square feet.
Despite this overall growth, certain cities will experience a dip in leasing during the final quarter of 2024. Chennai is projected to see a sharp 56% decrease in leasing activity, with only 1.9 million square feet absorbed, compared to 4.3 million square feet in Q4 2023. Similarly, Delhi-NCR and Pune will also experience reductions of 16% and 35%, respectively, in their leasing activity during the same period.
Among the sectors driving this leasing boom, the flex space market is poised for a record year. Flex space leasing will reach an all-time high of 4.7 million square feet in Q4 2024, contributing significantly to the overall demand for office space. The technology sector remains a primary driver, accounting for almost a quarter of the leasing activity, while flex spaces and the BFSI and engineering sectors also play key roles in sustaining the demand for office spaces.
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