WFH dead and gone: India hits 75m sft in office space

Hyderabad: In a clear indication that the work from home phase is over and companies now want their workers back in office, India’s office market has stepped into 2024 on a high. The year 2023 closed with gross leasing touching 75 million square feet, a neat 7% higher than 2019 – with all big cities like Hyderabad, Bengaluru, Delhi NCR, Mumbai, Chennai and Pune putting up an impressive show. Another reason to celebrate: The comeback of Indian firms and walking away with a chunk of this share. They had been dormant over the last few years. “Indian firms filled the void left by global organisations. Their contribution to leasing activity soared surpassing 40% in 2023 – an impressive leap from the average 25% observed during 2017 to 2019. This substantial growth stands as a testament to the dynamic evolution of business needs within the country and underscores the increasing allure of India's office market,” said Veera Babu managing director (tenant representation), India of global realty firm Cushman & Wakefield that recently released its 2023 report for the country. According to him, various thriving markets in Bengaluru, including Outer Ring Road, Bellary Road, along with prominent areas in Pune such as Viman Nagar, Kalyani Nagar, and Yerawada, as well as locations like Madhapur and Hi-Tec City in Hyderabad, witnessed a significant share of home-grown companies leasing commercial spaces last year. Collectively, Indian firms secured approximately 10 million sft in these three cities, with an average deal size of 40,000 sft. “While individual deals may not have reached the scale of 1 lakh sft or more as with large global corporations, the consistent growth in domestic demand is an encouraging trend,” said Veera Babu.Nirupa Shankar, joint managing director of Bengaluru-based Brigade Group made a similar observation. “The core markets like Whitefield are largely driven by big MNCs, but micro markets like Bengaluru’s northern corridor are witnessing an influx of traditional, Indian firms from sectors such as automobile, engineering, BSFI etc. The size of these leases is between 15,000 sft and 20,000 sft,” she said, adding how Indian firms are getting more aspirational and aiming for quality buildings. Shankar is certain of this pattern continuing through 2024. Other sectors expected to propel this growth: Pharma, insurance and health, said Tirumal Govindraj, CEO of RMZ Office, a major developer with assets across Bengaluru, Chennai, Hyderabad, Delhi NCR, Pune, and Mumbai. He underlined how outstanding performances by certain markets contributed to 2023’s leasing story. “For instance, Chennai, which is a 5 million sft market, will hit 9 million sft in 2023,” he said maintaining that quality drove all activity with Grade A buildings raking in most of the moolah.While Chennai and Pune almost doubled their pre-pandemic averages, smaller markets like Ahmedabad and Kolkata too contributed to this growth, indicating a trend of companies diversifying to different locations beyond the top 6, the Cushman and Wakefield report added.
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