by Dev Vasu Dwivedi
Nov 27 2024
India’s Office Leasing Boom: Domestic Firms Are Taking Charge
The Indian commercial real estate market is undergoing a transformative shift. Domestic firms are taking center stage in office leasing, creating ripple effects across the nation. This trend is particularly significant in Delhi NCR region. Which is set to become a commercial hub with the development of Jewar International Airport.
Key Trends in Domestic Office Leasing
Domestic firms accounted for 47% of total office leasing activity from 2022 to H1 2024, as highlighted by a recent CBRE report. With an estimated 60-65 million sq. ft. of office space set to be leased by domestic firms between 2024 and 2025, the market is primed for exponential growth.
Increase in Office Space Absorption by Domestic Firms
Increased business confidence, digitalization of services and workplace strategies led to a ~60% increase in office space leasing by domestic firms in 2022-23 as per reports by CBRE Research. The report further reveals, Delhi NCR has been the leading market for domestic space take-up since 2018, followed by Bengaluru and Mumbai.
City-Specific Insights
- Delhi-NCR: The leading region for office absorption, driven by the BFSI and technology sectors.
- Bengaluru & Hyderabad: E-commerce and life sciences firms are significantly expanding their presence.
- Mumbai: Maintains its dominance in BFSI leasing, contributing 43% of the total domestic BFSI activity.
Region-Wise Contribution to Office Leasing (2028-H1 2024)
The Driving Forces Behind This Growth
- Government Initiatives: Policies like Make in India and the Production Linked Incentive (PLI) Scheme are bolstering domestic manufacturing and creating employment opportunities.
- Skilled Talent Pool: With 2.5 million STEM graduates annually and over 100 unicorns, India’s workforce is fuelling this expansion.
- Flexible Workspace Adoption: 57% of domestic firms plan to use flexible spaces, with the flexible workspace market projected to reach 80 million sq. ft. by 2024.
Adoption of Flexible Workspaces
Future Outlook for Commercial Real Estate
The future is bright for commercial real estate in Noida and similar hubs:
- Flight to Quality: 86% of domestic occupiers prefer premium office spaces, driving demand for Grade A properties.
- AI and Job Creation: Emerging technologies are expected to generate 4.7 million tech jobs in five years, boosting demand for office spaces in IT hubs like Noida.
Why Noida is the Place to Invest
Noida, Greater Noida West, and Yamuna Expressway are ideally positioned to benefit from these trends. With growing demand for high-quality, adaptable workspaces, a large educated workforce coming out of knowledge parks and state-of-the-art infrastructure, these regions offer immense investment potential.
Contact us today to leverage these opportunities and secure a strong foothold in India's booming office leasing market that generates steady return on your investments for decades to come!
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