Gross office leasing expected to cross 50 mn sq ft in 2024: Colliers

Bengaluru; As per an optimistic forecast, total Grade A office leasing in India in 2024 calendar year will cross 50 million square feet (msf) for a third consecutive year to range between 55-60 msf, a report released by property consultancy Colliers and Federation of Indian Chambers of Commerce and Industry (FICCI), said on Tuesday.

Conversely, in a pessimistic or cautious scenario, wherein externalities prolong, office leasing may be restricted to anywhere between 45-50 msf, the consultant said. In 2023, overall Grade A office leasing in India stood at 58.2 msf. Grade A offices are commercial properties with high-end amenities and good connectivity.

“The anticipated resurgence in large-sized deals, projected to account for 50-55% of leasing activity in 2024, bodes a sense of stability in the office market of the country,” Vimal Nadar, who heads research at Colliers India, said. 

In the overall pie, domestic enterprises will account for more than half of the total office demand in 2024, the report stated. Simultaneously, global capability centres are set to gain further ground accounting for over 40% of gross demand. The back half of 2023 saw the highest space taken up by GCCs since 2020 at 12.4 msf across the top six markets in India, per the report.

Meanwhile, flexible offices are likely to drive about 15-20% of leasing, as peripheral business districts take up 30-35%. According to the report, peripheral locations are likely to witness 50-60 msf of completions in the next two years.

Elaborating on the recent churn witnessed in the tenant base of office properties in India, the report highlighted the banking, financial services and insurance and engineering and manufacturing sectors as strong demand drivers. “With subdued demand from the technology sector, demand from a diverse set of occupiers will continue to reshape the office market of India in 2024 and beyond,” it further stated.