The total office leasing in the third quarter of 2023 was 15.1 million square feet (msf) with Mumbai topping the charts at 3.5 msf, up 27 per cent quarter on quarter, according to Cushman & Wakefield data.

The National Capital Region was a close second followed by Hyderabad and Bengaluru.

The gross leasing volume (GLV) in the country in Q3 of 2023 saw a dip of 13 per cent sequentially, testifying to the slowdown in the office segment as corporations are still making up their minds on how much office space to take as employees prefer hybrid and flexible working models. India is one of the few places where office leasing is still seeing strong activity. Globally office spaces are sparsely utilised due to low physical attendance.

The property consultant said that the volume of leasing in India was almost the same as that recorded in the first quarter of the year.

In the first three quarters of 2023 the GLV was 48.2 msf, and Cushman & Wakefield said that it expected it to reach 64 msf for the entire year.

The report said that Mumbai was seeing consistent fresh space demand across prominent markets such as Bandra Kurla Complex, Lower Parel and higher-term renewal activity across suburban markets such as Powai and Malad-Goregaon. The sectors contributing to the activity are IT, captives, engineering and manufacturing, telecom, and financials.

“In the city, office leasing activity by the engineering and manufacturing sector grew by 48 per cent over the same period last year,” the report said.

The Delhi-NCR region saw a 4 per cent sequential dip in GLV and the leasing activity was dominated by IT and financials both of which showed robust annual growth.

In the eastern part of the country, Kolkata saw robust growth annually and sequentially on a low base, though in actual terms the volume of leasing was comparatively small.

The flex segment, which is increasing its share in the overall office leasing sector, contributed 11-12 per cent of the GLV in 2023, with the IT-BPM segment accounting for roughly a third of the tenants.

“The office segment is seeing major shifts in terms of evolving occupier demands,” said Anshul Jain, Head of APAC Tenant Representation and MD, India, and Southeast Asia.

“India is currently in the spotlight as a preferred destination for business expansion, the top tier markets are destined to witness more innovation and traction in the real estate place. We can expect a healthy sustained demand for Grade-A, compliant and sustainable office assets in these markets.”

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