Real Estate Boom: These Two Cities Accounted For More Than Half Of The Office Space Demand In India (image source: iStock)
Real Estate Boom: The commercial office space demand in the real estate industry is booming in these two southern cities Bengaluru and Hyderabad, In Grade A offices both cities accounted for more than half of India’s leasing activity in the first quarter of the financial year 2024 (Q1 FY24), ET reported.
Growing Prominence Of Bengaluru and Hyderabad
Traditionally, the office market in India has been driven by cities like Bangalore and Delhi-NCR, which have formed 59 per cent of the office demand in the last four years, according to Colliers. However, the first quarter of 2024 saw a shift in this trend with Bengaluru and Hyderabad emerging as frontrunners.
Major Real Estate Deals In Q1 2024
Several large deals were closed in the first quarter of 2024. Companies like Tablespace, Samsung, ANSR, and TATA Agratas leased large floor spaces upward of 1.5 lakh sq ft across Hyderabad and Bangalore.
Hyderabad’s Growing Prominence
“Hyderabad continued to strengthen its role as a prominent commercial office market in the country. The city offers occupiers, including Global Capability Centers, considerable price arbitrage compared to other markets. This demand was driven by the Healthcare & Pharma and Technology sectors,” Arpit Mehrotra, Managing Director, Office Services, ET quoted.
Proactive government policies, continuous infrastructure upgrades, and a favourable business ecosystem make Hyderabad a compelling destination for investors, occupiers, and leading developers of commercial real estate in India.
Office Market Absorption
The office market of Bangalore and Hyderabad witnessed 4 mn sqft and 2.9 mn sqft absorption, respectively. Delhi-NCR followed at the third spot with 2.5 mn sqft in Q1 2024 compared to the corresponding quarter last year. Among other major office markets, Mumbai also experienced a notable surge in leasing activity, with an impressive 90 per cent YoY rise in Q1 2024.
Real Estate Activity in Hyderabad
Within Hyderabad, the trifecta of Hi-Tec City, Gachibowli and Madhapur continued to drive leasing activity in Q1 2024. Of the 2.9 million square feet of Grade A space uptake in the first quarter, over 80% of the demand was concentrated in these three localities.
Strong Start Real Estate Industry In 2024
The first quarter of 2024 has started on a strong note, registering total leasing of 13.6 million square feet across the top 6 cities, marking a remarkable 35 per cent increase compared to the same period last year. This is indicative of upbeat occupier sentiment.
Sector-wise Leasing Activity
During Q1, occupiers from Technology, Engineering & Manufacturing, and BFSI sectors collectively accounted for 58 per cent of total leasing activity across the top 6 cities. This momentum, coupled with the resurgence in GCC demand, sets the stage for the rest of the year.
