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Domestic Firms Driving Indian Office Market Growth
Real Estate

Domestic Firms Driving Indian Office Market Growth

The Indian office market is undergoing a significant transformation, with domestic companies projected to lease 60-65 million square feet of office space between 2024 and 2025, as reported by CBRE. This shift marks a departure from the historical reliance on global corporations, particularly those from the United States.

Over the past two years, domestic firms have seen a remarkable 60% increase in office space absorption compared to the pre-pandemic period (2018-2019). They now account for nearly 47% of overall office leasing activity, with Delhi-NCR leading, followed by Bengaluru and Mumbai.

Cities like Bengaluru and Hyderabad have experienced heightened occupancy rates, driven by the e-commerce and life sciences sectors, respectively. Notably, Mumbai has captured a 43% share of domestic BFSI leasing, bolstered by contributions from Delhi-NCR and Chennai.

Prominent domestic firms, such as L&T Technology Services (545,000 sq ft in Bengaluru) and LTI Mindtree (1.2 million sq ft in Bengaluru and Chennai), are expanding their footprints to meet rising demand for tech-driven solutions. Anshuman Magazine, Chairman & CEO of CBRE, highlights that the robust growth of India's start-up ecosystem and talent pool are major demand drivers.

The office market's expansion is supported by government initiatives like the Make in India program and the Production Linked Incentive (PLI) Scheme. With a talent pool of 2.5 million STEM graduates and over 100 unicorns, the landscape is ripe for growth.

The top nine Indian cities are expected to add 185 million sq. ft. of premium office space by 2026, driven by sectors such as flexible space operators, BFSI, and technology, which together account for two-thirds of domestic leasing activity.

Overall, the demand for office space is set to remain robust, influenced by technological advancements, particularly in AI, which are anticipated to further enhance growth prospects.

The Indian office market is undergoing a significant transformation, with domestic companies projected to lease 60-65 million square feet of office space between 2024 and 2025, as reported by CBRE. This shift marks a departure from the historical reliance on global corporations, particularly those from the United States. Over the past two years, domestic firms have seen a remarkable 60% increase in office space absorption compared to the pre-pandemic period (2018-2019). They now account for nearly 47% of overall office leasing activity, with Delhi-NCR leading, followed by Bengaluru and Mumbai. Cities like Bengaluru and Hyderabad have experienced heightened occupancy rates, driven by the e-commerce and life sciences sectors, respectively. Notably, Mumbai has captured a 43% share of domestic BFSI leasing, bolstered by contributions from Delhi-NCR and Chennai. Prominent domestic firms, such as L&T Technology Services (545,000 sq ft in Bengaluru) and LTI Mindtree (1.2 million sq ft in Bengaluru and Chennai), are expanding their footprints to meet rising demand for tech-driven solutions. Anshuman Magazine, Chairman & CEO of CBRE, highlights that the robust growth of India's start-up ecosystem and talent pool are major demand drivers. The office market's expansion is supported by government initiatives like the Make in India program and the Production Linked Incentive (PLI) Scheme. With a talent pool of 2.5 million STEM graduates and over 100 unicorns, the landscape is ripe for growth. The top nine Indian cities are expected to add 185 million sq. ft. of premium office space by 2026, driven by sectors such as flexible space operators, BFSI, and technology, which together account for two-thirds of domestic leasing activity. Overall, the demand for office space is set to remain robust, influenced by technological advancements, particularly in AI, which are anticipated to further enhance growth prospects.

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