There’s an office boom going on in the country, and all of it is not just because of sectors like IT finally calling their professionals back to the workplace after years of WFH (work from home) since the pandemic.
“India’s status as one of the fastest-growing large economies has positively impacted office demand, with record-high transaction volumes,” said Shishir Baijal, chairman and managing director of Knight Frank, as the real estate consultancy revealed that the country’s leading real estate markets recorded all-time high office transactions in the first six months of 2024.
With nearly 35 million square feet of office space transactions across the eight leading cities in the country between January and June this year, Indian office real estate has scored a new record. This is a growth of 33 per cent compared to last year’s 26 million sq ft.
Bengaluru, whose IT and IteS powerhouses employ hundreds of thousands of professionals, not surprisingly, topped the table among Indian cities, accounting for one-fourth of all transactions, at 8.4 million sq ft. Mumbai and the Delhi NCR market (which comprises Gurugram and Noida, too) came in with around 5.8 and 5.7 million sq ft leasing and sales. Ahmedabad, where the government is actively promoting industrial growth and not just limited to GIFT city, was the surprise biggest growth story at a whopping 218 per cent, though it was on a lower base.
Chennai presented a curious paradox – it was the only major realty market in the country to see a reduction in office space transaction in the half-year period. However, this is more probably due to the acute lack of grade A commercial space in the city. The fact that rents rose the highest in this southern metropolis, at 9 per cent year-on-year, stands testament to this.
All this growth, even as it stands as a poster-boy to India’s stellar economic boom, is not just because IT and other outlier sectors are calling their staff back to office. The role of GCCs of global multinationals is mighty crucial here – they took in nearly 10 million sq ft, amounting to 48 per cent of the total transactions, compared to India-facing businesses taking in 41 per cent.
“India-facing businesses and GCCs are taking the lead position in transactions,” said Baijal. “Based on our expectations of continued stability in the socio-economic and political conditions and the current trajectory of growth, we anticipate a strong finish to year 2024.”
