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Indias office real estate market, despite global challenges, is entering a phase of accelerated growth, with net office space absorption in the top seven cities reaching 41.97 million sq ft in 2023. This marks a new post-COVID milestone and the second-highest annual absorption, fueled by talent and cost advantages and Indias growing reputation as an innovation and research hub.

The net office space absorption in the country is seen at par with 2022 closing at 37-39 million sq ft. With leasing activity expected to further pick up pace in the last quarter of 2023, the year is expected to surpass the 2017-2019 average, showed a JLL India analysis.

Average office net absorption to increase by 20-22% year-on-year in 2024, touching 45-47 mn sq ft

The recent central government notification allowing floor-wise denotification of IT Special Economic Zones (SEZs) is expected to rejuvenate the appeal of IT/IT-enabled services SEZs, transforming them into dynamic office hubs, according to a JLL India study.

In the June quarter, 10.49 million sq ft of new completions were recorded, up by 5.3% sequentially. Hyderabad dominated with a 47.2% share of new completions, followed by Bengaluru with a 22% share. Pan-India office space vacancy levels witnessed a marginal drop of 10 bps sequentially to 16.6%, which is expected to remain sticky within the range of 16-17%.