Office space leasing up 2% in July-Sep across 6 cities despite demand fall in Bengaluru: Colliers

New Delhi: Gross leasing of office space rose 2 per cent across six major cities to 13.2 million square feet during the July-September period driven by sharp increase in demand in Hyderabad, according to Colliers India.

The gross absorption of office space stood at 12.9 million square feet in the year-ago period. Gross absorption does not include lease renewals, pre-commitments and deals where only a letter of intent has been signed.

Real estate consultant Colliers India on Friday released the data of key office markets for the third quarter of 2023 calendar year, showing that the demand increased in four cities -- Mumbai, Pune, Hyderabad and Chennai -- but decreased in Bengaluru and Delhi-NCR.

As per the data, the gross office space leasing in Bengaluru declined to 3.4 million square feet during July-September from 4.4 million square feet in the year-ago period.

Delhi-NCR market too saw a fall in leasing to 3.2 million square feet from 4.3 million square feet.

On the positive side, the leasing of office space in Hyderabad jumped 2.5-fold to 2.5 million square feet from 1 million square feet.

In Mumbai, the absorption of office rose marginally to 1.7 million square feet from 1.6 million square feet.

The gross leasing of office space in Chennai grew to 1.4 million square feet from 1 million square feet.

In Pune, the absorption of office space increased to 1 million square feet from 0.6 million square feet.

"Contrary to earlier belief, India office demand for the first three quarters of 2023, has followed an overall trajectory almost similar to 2022. With strong domestic macro-economic indicators backing the demand for office space, the momentum is likely to continue in the last quarter of the year," Peush Jain, Managing Director, Office Services, India at Colliers, said.

It would be interesting to see if 2023 could breach the historic high leasing activity of 2022, he added.

Arpit Mehrotra, Managing Director, Office Services, South & Head of Flex at Colliers India, said, "Although Bengaluru will continue to dominate India leasing activity in 2023, Chennai and Hyderabad are likely to see greater demand acceleration in the last quarter of the year."