India’s office market poised for another record-breaking year

V Nagarajan

According to Cushman & Wakefield’s office report, the first half of 2024 recorded 41.9 msf of leasing, marking the highest leasing volume ever for the first half of any year. This represents 56% of the total gross leasing volume (GLV) for 2023. This impressive growth is driven primarily by fresh demand from multinational corporations, the optimisation of pre-leased buildings in key cities, and a higher return to office. The market is anticipated to maintain its strong momentum throughout the year with over 40 msf expected to be leased in the second half.

These impressive numbers can also be partly credited to Q2 2024, which alone saw a GLV of 21.8 msf across the top 8 cities, reflecting a 27% year-on-year increase and an 8.4% growth over the previous quarter. This consistent quarterly growth underscores the strong leasing momentum with GLV exceeding the 20 msf mark for the third consecutive quarter. One of the key drivers of this growth is quick deal closures by global multinationals and domestic companies, indicating a rise in occupier confidence.  India’s pivotal role in driving digital transformation for large global multinationals has also significantly contributed to the overall share of GCC transactions, which accounted for 26% of the total GLV in H1 2024. According to the report, around 120 GCC centres were established during the period. Bengaluru led the way, accounting for 47% of leasing by GCCs in H1 2024.

In terms of the cities, Bengaluru, Mumbai, Hyderabad, and Kolkata recorded the highest-ever leasing figures in H1 2024. Bengaluru and Mumbai saw the highest growth of 132% and 71% on y-o-y basis, followed by Hyderabad and Kolkata.

Net absorption in H1 2024 also reached new heights, recording a 46% year-on-year growth—the highest for any first half since 2020. While Bengaluru had the highest share of 29% net absorption amongst all top-8 cities in the first half of the year, cities such as Mumbai, Delhi-NCR, Chennai, and Kolkata recorded their highest-ever biannual net absorption. The overall Grade A vacancy rate decreased by 40 basis points to 17.7%, the lowest since Q4 2021, further indicating a tightening market.

The IT-BPM sector continued to dominate leasing activity, contributing 26% of the GLV in H1 2024. The BFSI sector followed as the second-largest contributor, recording a significant 60% growth compared to H1 2023. The engineering and manufacturing sector also showed strong performance, with a 31% year-on-year growth, capturing 17% of the lease volume. Flexible workspace operators saw a 44% year-on-year growth, while professional services maintained a stable share of 10-12% over the past two years.

New supply for the first half of 2024 stood at 20.8 MSF, with Hyderabad and Bengaluru together accounting for approximately 51% of the new supply. Hyderabad led with a 27% share, while Bengaluru continued its strong performance as a key driver of the market.

Veera Babu, managing director, Tenant representation, said, “While domestic companies continue to show a consistent growth, we’re also seeing a notable increase in demand from international businesses attracted to India’s dynamic economy and supportive business environment”.

“We are observing a surge of interest from companies across various sectors, not just technology or large corporations, eager to establish their presence in the Indian market. This trend is evident in H1 with the addition of 120 new GCC centres, contributing to ~26% of the total GLV share. We anticipate that 2024 GLV will surpass the historic milestone of 80 msf”,  said Anshul Jain, Chief Executive, India, Southeast Asia and Asia Pacific Tenant Representation.

My father died without writing a will. How does the assets get distributed in the family?  Harish Raj, Sharjah.

In the event of a Hindu male who dies intestate, class I legal heirs comprising deceased’s mother, widow and children, will get equal share in the property. 

I have been living in the Gulf for the past five years and my parents passed away recently.  In our family there are two brothers and one sister who inherit the family property.  My brother does not want a share in the property and how we do ensure compliance with legal formalities to inherit the property. Maneep Harides, Dubai

Your brother will have to execute a release deed or a settlement deed in your and your sister’s favour.  The legal document is of course subject to stamp duty and registration charges.  You and your sister can also apply for a legal heir certificate and the tehsildar, after conducting an enquiry will issue a certificate mentioning the names of legal heirs who succeeded to the estate.  With your brother’s release deed and legal heir certificate, you and your sister are in a legally sound position to either retain or sell the property at any stage.