Large Office Spaces Drive 45% of Commercial Transactions in India

In the first half of 2024, large office spaces those exceeding 100,000 square feet constituted a significant 45% of all commercial real estate transactions across eight major cities in India, according to a recent report by Knight Frank India.

The report highlights a notable 54% year-on-year increase in transactions for large office spaces, rising to 15.69 million square feet from 10.18 million square feet in the same period of 2023. Bengaluru led the way with a dominant 53% share of its total office transaction volume, totaling 4.5 million square feet in large office spaces.

Shishir Baijal, Chairman and Managing Director of Knight Frank, attributes this surge to the establishment of Global Capability Centres (GCCs) by corporations looking to bolster their long-term operations in India. “Flexible workspaces remain crucial, offering adaptability and cost efficiency, particularly for third-party IT services and startups”, Baijal noted.

Following Bengaluru, Hyderabad and Mumbai ranked second and third in large office space transactions, with 3.08 million square feet and 2.66 million square feet, respectively.

In the mid-office space segment (50,000 to 100,000 square feet), leasing activity reached 7.28 million square feet, marking a substantial 70% increase year-on-year. Mumbai and Delhi-NCR led in this segment with 1.57 million square feet each, while Hyderabad followed closely with 1.29 million square feet.

Smaller office spaces (below 50,000 square feet) saw a modest growth of 0.08% year-on-year, with total leasing reaching 11.7 million square feet.

This robust activity underscores the ongoing demand and evolving landscape of India's commercial real estate market.