India's office market is booming post-pandemic, with a strong preference for modern, high-quality office spaces. A JLL report reveals that from 2021 to Q1 2024, 164.3 million sq. ft of new Grade A office buildings were added nationally. Enthusiastic demand has led companies to lease over 113 million sq. ft since 2021, with 94.3 million sq. ft (80%) of this in new constructions. Southern cities like Bengaluru, Hyderabad, Chennai, and Pune lead this trend, capturing 84% of Global Capability Center (GCC) leasing. Modern buildings with better amenities and sustainability features are increasingly preferred, highlighting a shift towards contemporary work environments that boost employee well-being and productivity.
India's office market is experiencing a significant post-pandemic boom, with a strong preference for modern, high-quality office spaces driving the trend. A recent report by JLL reveals that between 2021 and the first quarter of 2024, a massive 164.3 million square feet of new Grade A office buildings were added to the national stock.
This surge in new construction is being met with enthusiastic demand. Across India's top seven office markets - Bengaluru, Chennai, Delhi NCR, Hyderabad, Mumbai, Pune, and Kolkata - companies have leased over 113 million sq. ft of office space since 2021. Remarkably, nearly 94.3 million sq. ft (over 80%) of this leased space falls within newly constructed buildings completed since 2021. This trend highlights a clear preference for modern office buildings with improved amenities, better infrastructure, and a focus on sustainability. Green-rated buildings completed between 2017 and 2020 captured a significant 70% share of net absorption within this age group, further emphasizing the importance of environmentally friendly features for office spaces.
Southern Indian cities like Bengaluru, Hyderabad, Chennai, and Pune, known for their thriving tech and Global Capability Centers (GCCs), are at the forefront of this modern office space movement. Since 2021, these cities have witnessed nearly 84% of all GCC leasing activity in India. Interestingly, this trend also includes companies vacating older office spaces - JLL reports that nearly 4.5 million sq. ft of office space in buildings constructed before 2016 have been vacated, suggesting a clear shift toward more contemporary work environments.
The preference for modern offices goes beyond aesthetics. These newer buildings offer a wider array of amenities, fostering collaboration and creativity among employees. They also prioritize factors like better lighting, ventilation, and energy efficiency, contributing to employee well-being and potentially boosting productivity. As companies look to attract and retain talent in a competitive market, modern, well-equipped offices are becoming a key factor in their real estate strategies.
This rise in demand for modern office spaces points towards a positive outlook for India's post-pandemic office market. By prioritizing high-quality, sustainable work environments, companies are not just attracting talent but also creating a foundation for a productive and successful future.
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