Office space leasing in 2024 likely to look north

Bengaluru: Office space leasing is likely to keep momentum in 2024 with a possibility of doing better than last year.

According to experts, companies across sectors; especially in technology sector, office space leasing is gaining momentum. This is expected to propel the demand for more commercial spaces in this calendar year. “In the technology sector, expansion of office spaces is happening in recent quarters. Also, many companies are leasing office spaces in different places of the city than consolidating those in one place. We are seeing a positive momentum from the beginning of the year.

Many companies are talking about expansion, which have been very quiet in terms of new investment. Companies, which used to be operating out of co-working spaces, are now looking at leasing their office spaces. So, 2024 likely to be a better year than last one,” Satish BN, Founder & Managing Director of real estate consultancy firm, Skydealz told Bizz Buzz.

Office leasing reached a record four-year high in 2023 with a gross absorption of 61.6 million sq ft across nine key cities, CBRE said in its report. BFSI (banking, financial services and insurance) and technology sectors were the key growth drivers of such high office space absorption last year.

The CBRE report has said that cities like Bengaluru, Delhi-NCR, Hyderabad, Chennai, and Pune would remain the key growth drivers in 2024. Similarly, in technology space, GCCs (Global Capability Centres) or technology captives of large multinational corporations have emerged as the major office leasing entities among the offshoring industry.

“Indian offshoring market has evolved itself as a significant occupier in India’s office space with leasing over 46 per cent of office space in 2023, with GCCs being the biggest offshore occupier. India’s offshoring market witnessed an overall leasing volume of 27.3 million sq ft- in calendar year 2023 (cumulative transaction volumes from GCC: 20.8 mn sq ft and third- party IT services: 6.5 mn sq ft), making it a significant increase of 26 per cent from the previous year,” the real estate consultancy firm, Knight Frank has said in its report.

The GCC landscape in India has grown significantly by fostering more than 1,580 centres across the nation in 2023. Talking about the offshoring leasing, Satish BN of Skydealz said that not only GCCs, but also IT services companies would drive the overall office leasing in the current year. “Cities like Bengaluru and Hyderabad are witnessing more interest from enterprises to lease office spaces,” he added.