The latest insights from Colliers International shed light on a significant uptick in commercial real estate rents across key cities in India. Here are the key highlights from the Q1 2024 office markets report:
Rising Demand for Superior Quality Offices
Colliers’ report underscores a growing trend where occupiers in the Asia Pacific region show a willingness to pay higher rentals for superior-quality offices. This trend is especially notable in select premium micro markets, where new office spaces command rental premiums of up to 20% over average quoted rentals.
Key Findings from the Report
Global Capability Centers (GCCs) play a pivotal role in driving India’s office space demand, contributing to 37% of overall leasing activity in Q1 2024.
Bengaluru and Hyderabad have emerged as major drivers of office market activity, collectively accounting for a substantial portion of leasing and supply in the first quarter.
Despite robust demand-supply equilibrium, vacancy levels have remained stable, indicating a healthy market balance.
Rental rates have surged by up to 8% year-on-year across key markets, with global firms capturing a significant 61% share.
Rental Trends in Top Office Markets
India’s leading office markets have experienced notable annual rental increases of 4-8%. This growth is fueled by strong demand and an influx of high-end, quality office supply.
Insights on Occupier Behavior
Occupiers are increasingly focused on locations that facilitate talent acquisition, contributing to India’s strong office market performance amidst robust economic growth and renewed confidence among occupiers.
High-Performing Markets and Sector Insights
Bengaluru’s Outer Ring Road and North Bengaluru are leading in leasing and supply, respectively, with the Engineering & Manufacturing sector dominating leasing activity.
Delhi-NCR’s Golf Course Extension Road in Gurugram has witnessed high space take-up, driven by technology firms.
Chennai and Pune also show positive growth trends, with notable increases in leasing activity in specific sectors.
Future Trends and GCC Impact
The report anticipates continued growth in flex spaces, with GCCs playing a significant role in driving office leasing activity, particularly in green-certified Grade A office spaces.
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By Proptechbuzz
By Ravi Kumar
