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Demand for large office spaces is rising significantly, accounting for about half of all commercial real estate deals in eight major cities in the first half of the year. According to Knight Frank India, deals for spaces over 100,000 square feet grew by 54% from last year, reaching 15.69 million sq. ft. Bengaluru led this trend, with office leasing making up 53% of total transactions, a 32% increase from the previous year. This surge is driven by multinational corporations establishing Global Capability Centres. Hyderabad and Mumbai follow, with significant mid-size leasing growth, highlighting a strong demand for flexible workspaces across major Indian cities.
Deals for large office space are seeing a significant rise in demand, with this type of workspace constituting about half of all commercial real estate deals in eight major cities for the first half of the year. This signals a growing preference for large office spaces in the country. According to data from Knight Frank India, a renowned real-estate consultancy firm, deals for large office spaces (above 100,000 square feet) were about 45% for the first half, reporting a 54% growth from the same period in the previous year, to 15.69 million sq. ft. Advertisement
Bengaluru's commercial market played a major role, with the office leasing segment occupying a chunk of it. Leasing transactions made up for about 53% of the total office space transactions in the city, totalling to 4.5 million sq. ft. This is a 32% increase from the previous year. Shishir Baijal, Chief Managing Director for Knight Frank India, said that Bengaluru is the most attractive market, due to the demand created from multinational corporations looking to enhance their presence in the Indian market. The increase in office space deals are driven by MNCs setting up Global Capability Centres (GCCs) - specialised units or offshore operations established in foreign countries to provide support services. Therefore, there is a critical need for flexible workspaces that offer adaptability and cost-efficiency for third party IT services and startups.
Followed in second and third place are Hyderabad and Mumbai respectively, with 3.08 million sq. ft and 2.66 million sq. ft each. In the mid-size leasing segment (spaces between 50,000 and 100,000 sq. ft), the office space leasing recorded 7.28 million sq. ft, which is a 70% increase. Mumbai and Delhi NCR reported the highest transactions in this particular market niche, with 1.57 million sq. ft each. Hyderabad reported the next highest with 1.29 million square feet.
The significant rise in demand for large office spaces, constituting about half of all commercial real estate deals in major cities, reflects the growing need for expansive and adaptable workspaces in India. Bengaluru leads this trend, driven by MNCs establishing Global Capability Centres, followed by Hyderabad and Mumbai. The surge in leasing activity, particularly in large and mid-size office spaces, underscores the increasing role of multinational corporations and the demand for flexible, cost-efficient work environments in the country's key commercial hubs.
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