Record office leasing surge in Delhi NCR, Mumbai, Pune and Chennai in Q1 2024: JLL India

Indian cities of Chennai, Delhi NCR, Mumbai, and Pune have achieved unprecedented levels of office leasing in the first quarter of 2024 outstripping all previous Q1 performances according to a report released by JLL India. The report highlights that four Indian cities Chennai, Delhi NCR, Mumbai and Pune have witnessed a sharp surge in demand spearheaded by domestic occupiers, particularly in the BFSI (Banking, Financial Services and Insurance ), Flex, and manufacturing/engineering sectors. The report showcases the resilience and adaptability of India's office market post-pandemic.

The combined gross leasing in these four cities soared to a staggering 10.62 million sq. ft, marking a significant milestone. Moreover, the overall gross leasing activity across India reached an impressive 15.16 million sq. ft in Q1 2024, showcasing a remarkable increase of approximately 13.8 per cent as compared to the same period last year. This surge represents the second-highest gross leasing ever recorded in the first quarter of any year, setting the stage for India's office market to reach and even surpass the peak activity levels witnessed in 2023.

"In Q1 2024, domestic occupiers intensified their demand, contributing approximately 53 per cent to the gross leasing activity. This remains in line with the trend being observed over the past 2 years where domestic occupiers have consistently gone toe to toe with their global counterparts in space acquisition. Moreover, this highlights the resilience and adaptability of India's office market," said Dr. Samantak Das, Chief Economist and Head of Research and REIS, JLL India.

The Flex and manufacturing/engineering sectors have maintained a robust growth trajectory, while the tech industry continues to grapple with sluggishness. Despite challenges, flex space accounted for 21 per cent of gross leasing during the quarter. The manufacturing/engineering sector's share also rose to 20.2 per cent, the highest in nearly three years, fueled by India's growing ecosystem attracting high-end R&D work. Delhi NCR and Bengaluru emerged as frontrunners, collectively accounting for approximately 47 per cent of the gross leasing in the quarter. Chennai accounts for 17.6 per cent of the overall leasing activity, followed by Mumbai and Pune.

The report says the surge in office leasing demand post-pandemic reflects India's resilience and strong fundamentals, positioning the market for sustained growth. With the entry of new Global Capability Centers (GCCs), expansion of existing GCCs, and favourable manufacturing policies, India's office market is primed to surpass peak levels witnessed in 2023, signalling a promising outlook for the future.