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Time of India
07-07-2025
- Business
- Time of India
Office space leasing set to cross 90 million sq ft in 2025
Office space leasing in the top 8 cities reached 21.4 million square feet (MSF) in Q2 (April-June) reflecting a 5% quarter-on-quarter growth while no significant change year-on-year, according to Cushman & Wakefield's report. With H1 2025 gross leasing now at 42 msf, the sector is firmly on track to surpass 90 million square feet of annual leasing activity – a new benchmark. This momentum follows 2024's historic performance of 89million square feet, with H1 2024 figures comparable to this year's. If trends hold, 2025 will mark the second consecutive year of 85+ million square feet of gross leasing, reinforcing a new baseline of market performance. 'India's office market continues to outperform global peers, underpinned by a solid economic outlook and long-term occupier confidence. Our forecast of more than 90 million square feet of gross leasing this year reflects the sector's structural strength—particularly as we see sustained growth in sectors like technology, BFSI, and engineering,' said Anshul Jain, Chief Executive, India, SEA & APAC Tenant Representation, Cushman & Wakefield. The strong leasing numbers reflect the depth of demand from global and domestic occupiers, with Global Capability Centres (GCCs), IT-BPM firms, flex operators, BFSI, and engineering & manufacturing companies driving growth. Live Events Gross leasing volume, which factors in all leasing activity in the market, including fresh take-up, open market renewals by corporates as well as pre-leasing, is an indication of overall market activity. 'The growth is being fuelled by a convergence of trends—expansion of existing occupiers, rapid scaling of GCCs, and entry of new domestic and global firms. But supply is lagging in core locations, creating a landlord's market. Occupiers looking for high-quality space need to act early, especially as pre-commitments are on the rise and rentals are climbing in prime markets,' said Veera Babu, executive managing director, tenant representation, Cushman & Wakefield. Net absorption, a key indicator of real estate demand in terms of expansion of occupied space in the market, stood at 13.5MSF in Q2, marking a 19% year-on-year growth, and totalled 27.8 msf for H1 2025. Fresh leases accounted for 77% of total leasing activity in H12025, a trend that has consistently remained above the 70% mark since late 2022. Notably, pre-commitments rose to 10%, suggesting a supply crunch in core markets and heightened occupier urgency. Global Capability Centres continued to be a major demand driver, contributing 24% of the overall leasing activity in the quarter at 5.1 MSF. Bengaluru (1.6 MSF) and Pune (1.6MSF) accounted for 63% of this leasing. H1-25 marked a historic high for GCC leasing in the first half of any year, with 11.4 msf transacted, up 3% year-on-year. IT-BPM held the largest share at 40%, followed by E&M GCCs with a share of 36%. The office market across the top 8 cities saw an influx of 12.5 million sq ft of new completions in Q2, a strong 53% increase y-o-y and a 17% q-o-q growth. Economic Times WhatsApp channel )
Economic Times
23-04-2025
- Business
- Economic Times
Short of quality space, companies go for custom-made offices
Corporates are increasingly leasing under-construction buildings and getting them built to specifications—fuelling demand for built-to-suit (BTS) properties. They are adopting this novel approach to overcome a chronic shortage of quality office space in India's top cities due to a demand-supply mismatch. ADVERTISEMENT India is currently short of about 20 million sq ft of Grade A+ office space on average every year. Developers say buildings of 500,000-1 million sq ft are in high demand, as they are considered ideal for setting up company headquarters. GMR, which runs the airports in Delhi and Hyderabad, is getting increasing requests for more office space in Delhi's Aerocity and Hyderabad. Bharti Realty, which is developing multiple office towers near the Delhi airport, is also seeing strong interest in BTS properties. 'With over 100 large deals (100,000+ sq ft) actively being negotiated and more than 50 signed in Q1 2025 alone, tenants are being forced to pre-lease under-construction spaces or shift to non-core locations, further accelerating demand for BTS options,' said Veera Babu, executive managing director, tenant representation at Cushman & Wakefield. 'The intense competition for high-quality, centrally-located office stock is likely to persist well into the next 12–18 months,' he post-pandemic construction boom initially supported rising office demand. However, the past two years marked a sharp slowdown in new supply across key submarkets with some even failing to make fresh space additions. This widening gap between demand and supply has pushed vacancy in prime micro-markets like Gurugram CBD, Mumbai BKC, ORR Bengaluru, and Madhapur Hyderabad to record low levels of 5%. "Companies seeking flexible, high-performing, and future-proof workspaces that can adapt to their changing operational demands are increasingly adopting BTS developments as a result of the continuous imbalance between supply and demand for premium, exceptional office space. At Bharti Real Estate, we are seeing a growth in demand for BTS offices in Worldmark Aerocity, our Global Business District in New Delhi, from both Indian and international companies,' said SK Sayal, MD & CEO of Bharti Real Estate. ADVERTISEMENT 'Together with the airport's closeness, multi mobility, the concentration of talent, unparalleled business efficiency all coming together in an integrated environment, our flexibility to personalise workplace requirements for BTS seekers makes it a very appealing proposition. As a result, we are explicitly targeting BTS potential at Worldmark 3.0 and Worldmark 4.0 (approx. 10Mn SFT)by providing fully customisable, modular, and sustainable workplace spaces on lease,' Sayal said. About 35% of office buildings delivered in the past three years in the country are currently fully occupied, with another 14% nearing saturation. ADVERTISEMENT 'The demand for BTS properties has been on the rise as they offer corporations operational and cost efficiencies,' said Peush Jain, MD – commercial leasing and advisory at Anarock Group. 'Besides domestic corporations, pent-up demand from GCCs is likely to further fuel this trend across key growth markets in India.'For single-tenant buildings, the most in-demand office space requirement is for 500,000 to 1 million sq ft, as tenants increasingly prefer to keep their identity within a larger ecosystem. For instance, in Delhi NCR, there are currently six large, consolidated requirements for around 1 million sq ft. ADVERTISEMENT "For global capability centers (GCCs), built-to-suit campuses are becoming critical to embedding culture, operations, and technology into the very fabric of the workplace. At Brookfield Properties, we collaborate closely with leading corporates and GCCs to co-create high-performance environments across our 55 million sq. ft. portfolio in India—aligned to global standards and long-term vision,' said Alok Aggarwal, MD & CEO, Brookfield Properties. 'The Mastercard tech hub at Bluegrass Business Park in Pune—developed as a built-to-suit solution within an under-construction asset—reflects this approach, with a strong focus on flexibility, sustainability, wellness, and technology integration,' Aggarwal said. ADVERTISEMENT India's office sector ended calendar 2024 with a record 89 million sq ft (MSF) of gross leasing volume (GLV) across the top eight cities. This strong performance was backed by fresh demand from multinationals, optimisation of pre-leased buildings, and increased return-to-office for of the key drivers of this momentum was quicker deal closures by both multinationals and domestic firms, signalling rising occupier confidence. Despite strong demand, supply of Grade-A office buildings struggled to keep pace. The year saw only 45 MSF of new Grade-A completions, resulting in a vacancy rate of 16%—declining 1.8–2 percentage points from Capability Centres (GCCs) accounted for 27–29% of overall office space demand in 2024, underscoring their growing significance in India's economy and commercial real estate sector. Robust demand from multinationals further tightened core office space markets in the major cities last year. However, 2025 is expected to see a recovery in supply, with a substantial share expected in the suburban markets. (You can now subscribe to our Economic Times WhatsApp channel)
Time of India
23-04-2025
- Business
- Time of India
Why companies are now opting for custom-made offices
Approximately one-third of commercial office spaces completed in India during the previous three-year period have achieved full occupancy rates. (AI image) Companies are increasingly opting to lease under-construction buildings with custom specifications, driving the demand for built-to-suit (BTS) properties. This trend emerges as a solution to address the significant shortage of premium office spaces across major Indian cities. Currently, India faces an annual deficit of approximately 20 million sq ft of Grade A+ office space. According to developers, there is substantial demand for buildings ranging from 500,000-1 million sq ft, which are considered optimal for corporate headquarters. GMR, operating airports in Delhi and Hyderabad, reports growing requests for office space in Delhi's Aerocity and Hyderabad. Similarly, Bharti Realty's office tower developments near Delhi airport are attracting considerable interest in BTS properties. "With over 100 large deals (100,000+ sq ft) actively being negotiated and more than 50 signed in Q1 2025 alone, tenants are being forced to pre-lease under-construction spaces or shift to non-core locations, further accelerating demand for BTS options," said Veera Babu, executive managing director, tenant representation at Cushman & Wakefield. "The intense competition for high-quality, centrally-located office stock is likely to persist well into the next 12–18 months," he told ET. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Moose Approaches Girl At Bus Stop In Kemerovskaya Oblast - Watch What Happens Happy in Shape Undo The construction surge following the pandemic initially met office demands. However, recent years showed reduced new supply in key areas, with some locations experiencing no additional space. This disparity has resulted in historically low vacancy rates of 5% in prime locations like Gurugram CBD, Mumbai BKC, ORR Bengaluru, and Madhapur Hyderabad. Complete occupancy exists in 35% of office buildings completed in the past three years, while 14% are approaching full capacity. "The demand for BTS properties has been on the rise as they offer corporations operational and cost efficiencies," said Peush Jain, MD – commercial leasing and advisory at Anarock Group. "Besides domestic corporations, pent-up demand from GCCs is likely to further fuel this trend across key growth markets in India." Single-tenant buildings of 500,000 to 1 million sq ft are particularly sought after, as organisations prefer maintaining distinct identities within larger complexes. Delhi NCR currently has six major requirements for approximately 1 million sq ft each. India's office sector achieved record figures in calendar 2024 with 89 million sq ft (MSF) of gross leasing volume across eight major cities. This success stemmed from new multinational demand, optimised pre-leased buildings, and increased office attendance. Swift deal completions by international and domestic companies demonstrated growing occupier confidence, driving this momentum. Despite high demand, Grade-A office supply remained insufficient. The year recorded 45 MSF of new Grade-A completions, resulting in 16% vacancy, down 1.8–2 percentage points from 2023. Global Capability Centres (GCCs) represented 27–29% of total office space demand in 2024, highlighting their increasing importance in India's economy and commercial property sector. While robust multinational demand constrained core office markets in major cities last year, 2025 anticipates improved supply, particularly in suburban areas.
Time of India
23-04-2025
- Business
- Time of India
Short of quality space, companies go for custom-made offices
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Corporates are increasingly leasing under-construction buildings and getting them built to specifications—fuelling demand for built-to-suit (BTS) properties. They are adopting this novel approach to overcome a chronic shortage of quality office space in India's top cities due to a demand-supply is currently short of about 20 million sq ft of Grade A+ office space on average every year. Developers say buildings of 500,000-1 million sq ft are in high demand, as they are considered ideal for setting up company which runs the airports in Delhi and Hyderabad, is getting increasing requests for more office space in Delhi's Aerocity and Hyderabad. Bharti, which is developing multiple office towers near the Delhi airport, is also seeing strong interest in BTS properties.'With over 100 large deals (100,000+ sq ft) actively being negotiated and more than 50 signed in Q1 2025 alone, tenants are being forced to pre-lease under-construction spaces or shift to non-core locations, further accelerating demand for BTS options,' said Veera Babu, executive managing director, tenant representation at Cushman & Wakefield. 'The intense competition for high-quality, centrally-located office stock is likely to persist well into the next 12–18 months,' he post-pandemic construction boom initially supported rising office demand. However, the past two years marked a sharp slowdown in new supply across key submarkets with some even failing to make fresh space additions. This widening gap between demand and supply has pushed vacancy in prime micro-markets like Gurugram CBD, Mumbai BKC, ORR Bengaluru, and Madhapur Hyderabad to record low levels of 5%.About 35% of office buildings delivered in the past three years in the country are currently fully occupied, with another 14% nearing saturation.'The demand for BTS properties has been on the rise as they offer corporations operational and cost efficiencies,' said Peush Jain, MD – commercial leasing and advisory at Anarock Group. 'Besides domestic corporations, pent-up demand from GCCs is likely to further fuel this trend across key growth markets in India.'For single-tenant buildings, the most in-demand office space requirement is for 500,000 to 1 million sq ft, as tenants increasingly prefer to keep their identity within a larger ecosystem. For instance, in Delhi NCR, there are currently six large, consolidated requirements for around 1 million sq office sector ended calendar 2024 with a record 89 million sq ft (MSF) of gross leasing volume (GLV) across the top eight cities. This strong performance was backed by fresh demand from multinationals, optimisation of pre-leased buildings, and increased return-to-office for of the key drivers of this momentum was quicker deal closures by both multinationals and domestic firms, signalling rising occupier strong demand, supply of Grade-A office buildings struggled to keep pace. The year saw only 45 MSF of new Grade-A completions, resulting in a vacancy rate of 16%—declining 1.8–2 percentage points from Capability Centres (GCCs) accounted for 27–29% of overall office space demand in 2024, underscoring their growing significance in India's economy and commercial real estate demand from multinationals further tightened core office space markets in the major cities last year. However, 2025 is expected to see a recovery in supply, with a substantial share expected in the suburban markets.
