Office Demand Soars 15% Across India, Despite Bengaluru's 10% Slide

India’s office space leasing saw a 15 percent rise to 59.6 million square feet in 2023, reflecting the country”s strong economic fundamentals.

However, Bengaluru, the largest workspace market with over one-fourth share, witnessed a decline in demand compared to Mumbai and Delhi NCR, where the leasing of office space grew 16 percent to 7.4 million square feet and 14 percent to 10.1 million square feet, respectively, according to a report by real estate consultant Knight Frank India.

Pune, Chennai, and Kolkata recorded the best performances since the COVID-19 pandemic, with a 9 percent increase in leasing to 6.7 million square feet, 92 percent to 10.8 million square feet, and 20 percent annual growth in leasing to 1.4 million square feet, while in Bengaluru and Ahmedabad, the demand fell 14 percent to 12.5 million square feet and 15 percent to 1.8 million square feet, respectively.

According to the report, the demand was mainly triggered by Global Capability Centers (GCCs), which took on 20.8 million square feet last year, up 58 percent from the 2022 level.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “The impetus behind India”s recent dominance in office absorption is attributed to its strong economic fundamentals.”

“India will continue to play up on its natural advantages, which include excellent real estate, highly competitive rents, a very strong talent pool and a consistently growing economy, making it a robust end-user market. These factors will catalyse for advancing further demand for office space,” Baijal said.