Office Space Demand Nearly Doubles In October-December In Top Six Cities: Colliers

Office space demand surged 92% during the October-December period across six major cities on better demand for workspace from corporates and coworking operators, according to Colliers India.

"The Indian office market not only navigated initial uncertainties but exceeded expectations and emerged successfully, recording an impressive 58 million sq ft of gross absorption during 2023," Arpit Mehrotra, managing director, head of office services, Colliers India, said. "The demand momentum, particularly as seen during the last quarter, will pave way for an optimistic start to 2024."

"Notwithstanding unforeseen events, a stable economic outlook augurs well for Indian commercial real estate and office markets will continue to witness steady interest from domestic as well as foreign-origin occupiers," Mehrotra said.

Colliers India pointed out that the contribution of tech sector to office leasing has been steadily decreasing from around 50% in 2020 to 25% in 2023.

The sectoral contributions from BFSI and engineering & manufacturing sectors especially have almost doubled, increasing from 10-12% in 2020 to around 16-20% in 2023.

Interestingly, in 2023, leasing by engineering and manufacturing players (26% share) surpassed the demand emancipating from technology firms (22% share) in the tech hub of Bengaluru.

Demand from flexible space operators rose 24% to 8.7 million sq ft in 2023.