India gross office leasing volume down 13% to 15.1msf as of Q3

Mumbai experienced the strongest leasing volume growth.

According to a report from Cushman and Wakefield, gross leasing volume in India’s office market stood at 15.1 msf as of Q3-23, which was nearly 13% lower, both on q-o-q as well as y-o-y basis. 

In the previous quarter, GLV was recorded at 17.4 msf, which was comparable to the quarterly average number that we witnessed in 2022 – a record year for the Indian office real estate market. 

Here’s more from Cushman and Wakefield:

In comparison, the year 2023 seems to be going a bit slow with average quarterly leasing volume of merely 16 msf. All components of the GLV, vis-à-vis fresh leasing, term renewals and pre-commitments, witnessed a fall relative to last quarter. 

Amongst the major metropolitan cities, Mumbai witnessed strongest growth of 27% q-o-q in gross lease volumes. Chennai and Kolkata too witnessed sharp growth in GLV on q-o-q basis during the quarter, while other cities saw a fall in GLV. Fresh leasing fell by 13% on a q-o-q basis or near-about 8% on a y-o-y basis. As occupiers maintain a cautiously optimistic outlook on the Indian economy and real estate sector, the interest level remains high but time required to close deals has also increased. 

Having said that, fresh leasing (~10.5 msf) continues to hold a dominant share in GLV of 69%, similar to shares it held in the previous quarters, whereas term renewals and pre-commitments shares stood at 19% and 12%, respectively. Hyderabad led the fresh leasing volumes in the quarter with a 21% share followed by Delhi NCR and Bengaluru with 19% and 17% shares respectively. Rents across most markets remain broadly stable amidst rising supply and a cautiously optimistic office demand outlook.