The first quarter of 2024 started on a strong note, registering total leasing of 13.6 million square feet across the top 6 cities, marking a remarkable 35% increase compared to the same period last year, shows a report by property brokerage firm Colliers India.
Although this is a significant drop from the record office space take-up in the last quarter of 2023, the remarkable annual increase is indicative of upbeat occupier sentiment, given the fact that the first quarter is typically slower. Bengaluru and Hyderabad emerged as frontrunners for demand of Grade-A office space in Q1 2024, cumulatively accounting for more than half of the India leasing activity, it said.
The office market of Hyderabad especially demonstrated a strong momentum with 2.2x space uptake in Q1 2024 as compared to the corresponding quarter last year. This demand was driven by Healthcare and Pharma and Technology sectors. Among other major office markets, Mumbai too experienced a notable surge in leasing activity, an impressive 90% YoY rise in Q1 2024.
“Hyderabad continues to strengthen its role as a prominent commercial office market in the country. The city offers occupiers including Global Capability Centers considerable price arbitrage compared to other markets. Furthermore, proactive government policies, continuous infrastructure upgrades and a favorable business ecosystem makes Hyderabad a compelling destination for investors, occupiers, and leading developers of commercial real estate in India. Within Hyderabad, the trifecta of Hi-Tec City, Gachibowli and Madhapur continued to drive leasing activity in Q1 2024. Of the 2.9 million square feet of Grade A space uptake in the first quarter, over 80% of the demand was concentrated in these three localities,” says Arpit Mehrotra, managing director, Office services, India, Colliers.
Trends in Grade-A gross absorption (in million sqft)
| City | Q1 2024 | Q1 2023 | YoY change (%) |
| Bengaluru | 4 | 3.2 | 25% |
| Hyderabad | 2.9 | 1.3 | 123% |
| Delhi-NCR | 2.5 | 2.2 | 14% |
| Mumbai | 1.9 | 1 | 90% |
| Chennai | 1.5 | 1.6 | -6% |
| Pune | 0.8 | 0.8 | – |
| Pan India | 13.6 | 10.1 | 35% |
Source: Colliers
Note- Q1: 1st January to 30th March of the year
Gross absorption: does not include lease renewals, pre-commitments and deals where only a letter of Intent has been signed.
Top 6 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune.
During Q1 2024, new supply across top 6 cities remained steady, at 9.8 million square feet, almost at par with the level seen in Q1 2023. Bengaluru witnessed significant new project completions, contributing to 45% of the total new supply, followed by Hyderabad at 27% share. With demand outpacing supply, average rentals saw up to 8% uptick on a YoY basis across most of the major markets. Vacancy levels, meanwhile, are expected to remain steady, hovering around 17.3% by the end of Q1 2024.
Trends in Grade-A new supply (in million sqft)
| City | Q1 2024 | Q1 2023 | YoY change (%) |
| Bengaluru | 4.4 | 4 | 11% |
| Hyderabad | 2.6 | 2.4 | 8% |
| Mumbai | 1 | 0.4 | 150% |
| Pune | 1 | 0.6 | 67% |
| Delhi-NCR | 0.5 | 1.3 | -62% |
| Chennai | 0.3 | 0.8 | -63% |
| Pan India | 9.8 | 9.5 | 3% |
Source: Colliers
Note- Q1: 1st January to 30th March of the year
Top 6 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune
Technology, engineering & manufacturing and BFSI sectors drove space uptake in Q1 2024
“Driven by strong domestic occupier activity across Technology and Engineering & manufacturing sectors, the first quarter of 2024 signals a strong start for India’s office market. During Q1, occupiers from Technology, Engineering & Manufacturing, and BFSI sectors collectively accounted for 58% of total leasing activity across the top 6 cities. This momentum, coupled with the resurgence in GCC demand, sets the stage for the rest of the year. Healthy demand supply dynamics are likely to prevail throughout 2024. As business sentiments and economic outlook remains positive, domestic occupiers, especially will continue to drive the office market of the country,” says Vimal Nadar, senior director and head of research, Colliers India.
During Q1 2024, the demand for office space across the top 6 cities continued to remain broad-based. At 2.8 million square feet, Engineering & manufacturing leasing soared to over 2.3x times in Q1 2024 compared to the first quarter of 2023. Bengaluru accounted for about 55% of the activity in the sector, underscoring occupiers’ continued preference for the market. BFSI and Flex space too continued their healthy space take up across most cities, garnering 14% and 13% share, respectively in overall India leasing for Q1 2024.
Sector-wise Pan India leasing (in msf)
| Sector | Q1 2024 | Q1 2023 | YoY change % |
| Technology | 3.2 | 2.2 | 42% |
| Engineering & Manufacturing | 2.8 | 1.2 | 128% |
| BFSI | 1.9 | 1.5 | 32% |
| Flex space | 1.8 | 2.1 | -13% |
| Healthcare & Pharma | 1.2 | 0.6 | 90% |
| Consulting | 1.1 | 1.1 | 1% |
| Consumables | 0.3 | 0.2 | 19% |
| E-commerce | 0.04 | 0.2 | -80% |
| Others | 1.3 | 1 | 36% |
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at [email protected] |
An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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