Office Space Crunch in Major Indian Markets: Demand Surpasses Supply

The Delhi-NCR and Mumbai property markets experienced a substantial decline in the new supply of office spaces by 15% and 37%, respectively, due to strong demand from domestic and international firms. Despite this, Bengaluru, Chennai, and Pune saw improvements, and overall office space leasing rose by 6% across India's seven major cities.

The property markets of Delhi-NCR and Mumbai have witnessed a significant downturn in the past year, with a 15% and 37% drop in new office space supply, respectively. This is despite a robust demand for prime office spaces from both domestic and international entities, according to data provided by Colliers India.

The report highlights that the demand for office space has exceeded supply across India's seven major cities, including Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Pune, and Kolkata, resulting in reduced vacancy levels. The technology sector, along with the Banking, Financial Services, and Insurance (BFSI) sectors, are primary contributors to this demand, spurred by foreign firms establishing Global Capability Centres (GCCs) within India.

While the supply of new office space faltered in several major markets, regions like Bengaluru, Chennai, and Pune reported improvements. Bengaluru saw a 15% uptick in new office supply, and Chennai's supply more than doubled. Notably, office space leasing increased by 6% overall, reducing vacancy levels and boosting average rental prices across major cities.

(With inputs from agencies.)