Office space leasing in Delhi-NCR falls 25% in Q4: Report

Office space leasing: Office space leasing in Delhi-NCR witnessed decline of 25 per cent annually, totalling 18.1 lakh square feet in January-March this year, according to real estate consultant Vestian. The drop came on the back of reduced demand from corporates compared to the year-ago period, when office absorption stood at 24 lakh square feet.

The data released by Vestian also showed 40 per cent decrease in office space leasing in Delhi-NCR from 30 lakh square feet in the October-December quarter. Across the top seven major cities, office absorption increased by 13 per cent to 134 lakh square feet in January-March 2024, compared to 118.5 lakh square feet in the corresponding period last year.

However, despite the annual increase in office absorption, there was 31 per cent decline during the first quarter of this year, following a peak in the fourth quarter of 2023. Vestian CEO Shrinivas Rao expressed optimism about the positive start to 2024, noting sustained absorption activities in major office markets across India.

Rao also highlighted the potential resurgence in demand for office spaces driven by return-to-office mandates, which may propel the next wave of growth amid global headwinds. Bengaluru, Chennai, and Hyderabad, accounted for 61 per cent of the pan-India absorption in January-March period, with their combined share increasing from 54 per cent compared to the previous year.

The IT-ITeS sector dominated absorption with a 47 per cent share, followed by the BFSI sector with 11 per cent share. Additionally, flexible spaces garnered interest from large conglomerates post-pandemic, accounting for 8 per cent of pan-India absorption in Q1 2024.

In specific cities, office leasing trends varied. In Bengaluru, leasing declined to 26.2 lakh square feet, while Chennai witnessed a doubling of office demand to 33.5 lakh square feet. Similarly, office leasing in Hyderabad rose to 22.7 lakh square feet, and Mumbai experienced a doubling of office space absorption to 24.9 lakh square feet.

Conversely, Kolkata saw a decline in leasing to 1.6 lakh square feet, and Pune witnessed a decrease to 7.1 lakh square feet during January-March 2024 from 15 lakh square feet in the year-ago period.

(With PTI inputs)