India office leasing set to surpass 50 million sq ft in 2024, marking a 'new normal' in commercial real estate: FICCI Colliers Report

The Indian commercial real estate industry is setting new milestones as Indian office space leasing is expected to surpass 50 million square feet in 2024, as per the latest FCCI-Colliers report released on Tuesday, March 5.

The report released by trade body FICCI and investment management company Colliers International at the 17th edition of the FICCI Real Estate Summit highlighted the unprecedented leasing activity witnessed in 2022 and 2023, establishing a 'new normal' with leasing activities leading to such expectations in 2024.  

According to the report, domestic companies are expected to contribute to over 50 per cent of the office demand in 2024, with GCCs gaining further ground, accounting for over 40 per cent of the total demand.

The demand for Grade A office spaces is likely to be propelled by the banking, financial services, and insurance sectors, along with the engineering and manufacturing sectors, while flex spaces are forecast to drive about 15-20 per cent of the overall leasing.

Sanjay Dutt, MD and CEO of Tata Realty and Infrastructure, said that India's office space supply is poised to surpass one billion square feet. He highlighted that approximately six to seven companies in the country employ over 65 per cent of their global workforce in India. Additionally, he pointed out that banking and financial services firms, which traditionally limited their Indian workforce to 10 per cent of their global total, have now expanded to encompass 30 per cent and are on a trajectory to reach 50–60 per cent of their worldwide employee base.

Large-sized deals, defined as 100,000 square feet or more, are projected to constitute 50–55 per cent of the leasing activities in 2024.

The report also suggested that there is potential to scale up in nation's commercial real estate market by 60 million square feet, driven by high demand from domestic enterprises and GCCs.

Gaurav Pandey, Co-Chairman, FICCI Committee on Urban Development and Real Estate, and Managing Director and CEO, Godrej Properties, highlighted the vibrant potential of India's real estate sector.  He emphasised the explosive growth of Indian wealth, particularly in equities and gold, and its implications for residential real estate. Pandey also mentioned the transformative impact on land and property values, especially in top cities. He pointed out the critical role of urban migration in this evolution, suggesting a significant shift towards higher-income brackets and its consequent effect on the demand for residential spaces.