Bengaluru, India’s bustling tech hub, witnessed a remarkable 15-fold surge in net office leasing during the last quarter of the year, according to a report by real estate consultant Cushman & Wakefield. The surge is attributed to significant leasing transactions by corporates and the favorable impact of a low base effect.
During the October-December period, net office leasing across eight major cities in India soared to 18.63 million sq ft, a substantial increase from 9.06 million sq ft in the corresponding period of the previous year. Bengaluru took center stage in this surge, achieving both the highest volume and the maximum percentage increase.
The net office leasing in Bengaluru skyrocketed from 5,18,622 sq ft in the year-ago period to an impressive 80,50,266 sq ft during October-December. Cushman & Wakefield explained the surge by pointing to large deals that, while under negotiation in previous quarters, were finalized in Q4 as occupiers adopted a more positive approach.
The report also highlighted the low base effect in the last quarter of 2022, marked by caution exercised by global occupiers due to fears of a US recession and rising inflation, negatively impacting market sentiment.
While Bengaluru led the surge, other cities experienced varying trends in office leasing:
- Mumbai witnessed a 9% decline to 22,46,920 sq ft.
- Delhi-NCR reported a 37% decrease to 16,25,514 sq ft.
- Chennai saw a 37% increase to 14,48,595 sq ft.
- Pune marked a 58% growth to 1,898,143 sq ft.
- Hyderabad witnessed a threefold increase to 26,18,424 sq ft.
- Kolkata reported a nearly 2% growth to 257,700 sq ft.
- Ahmedabad experienced a more than doubling of leasing to 4,92,795 sq ft.
Anshul Jain, Managing Director, India & South East Asia, at Cushman & Wakefield, expressed optimism about India’s office market fundamentals. He stated that despite global challenges, Q4 and the entire 2023 exceeded optimistic projections, turning out to be the best-performing period ever.
Bengaluru-based flexible space operators Urban Vault and BHIVE confirmed the growing demand for managed office spaces, particularly in Bengaluru, Hyderabad, Mumbai, and Gurugram.
