Bengaluru remained the largest office market in H12024; Demand for office space from IT firms may double in the next half of the year: Knight Frank
Livemint
Published16 Jul 2024, 02:45 PM IST
Office space absorption may touch more than 70 mn sq ft by end of the year: Knight Frank (Representational photo) (Freepik)
Office space market across the top eight cities in India recorded its highest ever transaction volume in a half yearly period at 34.7 million square feet (mn sq ft) in H1 2024. The transactions recorded a YoY growth of 33% in H1 2024 from 26.1 mn sq ft in H1 2023. This is expected to touch more than 70 mn sq ft by the end of the year on the back of renewed demand for office space from IT and ITeS companies in the next few months, Knight Frank India said in its report released on July 4.
“We are staring at an office absorption opportunity of more than 70 mn sq ft before the end of the year. We are currently at 34 mn sq ft. The second half of the year may see demand for offices picking up from the IT and ITeS segment. This segment which commanded 40% share in office leasing before COVID-19 is now at barely 10%. This demand is expected to bounce back in the next few months propelling the commercial space take-up to go beyond 70 mn sq ft by the end of the year,” explained Viral Desai, Senior Executive Director, Occupier Strategy & Solutions, Industrial & Logistics, Capital Markets and Retail Agency, Knight Frank India.
Play
Unmute
Loaded: 4.84%
Fullscreen
He explained that while return-to-work has picked up in India, it has not taken off in the United States. “With employees not willing to return to work and the cost of hiring going up in the US, some companies may be compelled to outsource work to India, a large part of which may be taken up by third party IT firms. These companies may take up close to half a million- million sq ft of space pushing demand for office space take-up," he said.
In Delhi-NCR, office space demand grew 11.5% to 5.7 million square feet. Bengaluru witnessed a 21% rise in office demand to 8.4 million square feet. In Pune, leasing of office space rose 88% to 4.4 million square feet. Chennai witnessed a 33% fall in office demand to 3 million square feet. In Hyderabad, office demand soared 71% to 5 million square feet. Kolkata witnessed a 23% rise in leasing of office space to 0.7 million square feet. In Ahmedabad, the office space leasing jumped to 1.7 million square feet.