Office Space Dynamics: Supply Dwindles, Demand Skyrockets

The new supply of office space in seven major Indian cities fell by 4% during Q3 2024, while gross leasing increased by 17%. Bengaluru saw the largest surge in supply and leasing demand, with a decline noted in Hyderabad. BFSI and flexible spaces lead the demand growth.

New data from real estate consultant Vestian reveals a shift in office real estate dynamics across seven major Indian cities. Despite a 4% drop in new supply, leasing activities surged by 17% during the July-September quarter.

Detailed insights from the report indicate sharp contrasts between cities, with Bengaluru noting a 33% increase in supply and an 84% rise in demand. Conversely, Hyderabad recorded a 25% decrease in both supply and demand.

The BFSI and flexible space sectors were identified as the leading drivers of this demand, together accounting for 39% of national office space absorption, a significant rise from the last quarter.

(With inputs from agencies.)