India's Office Market Sees Rental Surge and Increased Demand
India's leading office markets are experiencing a significant increase in rental rates, driven by strong demand and a rise in high-quality office supply. This is according to Colliers' 'Expert Insights | Asia Pacific Office Markets April 2024' report.
Rental Rates: Rentals have surged by up to 8% year-on-year across key markets, surpassing pre-pandemic levels.
Occupiers are willing to pay higher rents for superior-quality office spaces, particularly in premium micro-markets.
Global Capability Centers (GCCs) are a major driver of office space demand, accounting for 37% of leasing activity in Q1 2024.
Bengaluru and Hyderabad witnessed the highest leasing and supply activity, accounting for around half of the market share.
Suburban and peripheral areas are seeing increased demand due to their affordability.
The flex space segment is expanding rapidly, with an 8.7 million square feet of leasing in 2023.
Bengaluru: Outer Ring Road led leasing activity, while North Bengaluru led supply in Q1 2024.
Golf Course Extension Road witnessed the highest space take-up, driven by technology firms.
Hi-tec City accounted for 80% of total office leasing during the quarter.
Navi Mumbai and Goregaon/Malad were the most active micro-markets, accounting for half of gross absorption.
Viman Nagar had the highest leasing, led by BFSI, Technology, and Engineering & Manufacturing occupiers.
GCCs are expected to lease 45-50 million square feet of office space in the next two years, with a preference for green-certified Grade A offices in sub and near-dollar micro markets. This trend highlights the growing importance of cost-conscious occupiers and the demand for high-quality, sustainable office spaces.