Best ever office leasing performance: Chennai, Delhi NCR, Mumbai and Pune outshine compared to all previous Q1 performances in these cities: JLL
The four cities together recorded a combined total gross leasing of 10.62 million sq. ft

• Q1 2024 Gross leasing* hits 15.16 million sq. ft., marks second highest Q1 figure

• Domestic demand drives growth, contributes ~53% to the overall leasing activity

• Delhi NCR leads, Bengaluru follows - Together account for ~47% of leasing activity

• 2024 Gross leasing on track to surpass last year's 63 million sq. ft. record

Mumbai, 08th April 2024: The markets of Chennai, Delhi NCR, Mumbai and Pune achieved historic gross leasing highs in Q1 2024 (Jan-March) compared to all previous Q1 performances in these cities. The main forces behind this have been domestic occupiers, particularly in the BFSI, Flex, and manufacturing/engineering sectors, who have outperformed their international competitors by driving demand in these locations.

At an overall level as well, gross leasing activity reached an impressive 15.16 million sq. ft in Q1 2024, an increase of ~13.8% compared to the same period last year. This marks the third consecutive quarter where gross leasing has surpassed the 15 million sq. ft mark, following the historical high of 20.94 million sq. ft in Q4 2023 and 16.03 million sq. ft in Q3 2023. Notably, this also represents the second-highest gross leasing ever recorded in the first quarter of any year, only trailing the levels of 17.3 million sq. ft witnessed in Q1 2020. The quarter has set the platform for India’s office market to reach and even surpass the peak activity levels witnessed in 2023. 

In the first quarter of 2024 belonged to the domestic occupiers, particularly in the BFSI, Flex, and manufacturing/engineering segments as they gained a majority share in office leasing.

“India's office ecosystem is a blend of “office to the world” and strong domestic sector growth. While global corporations remain strong takers of office space in India, their sluggish decision-making has seen the strong domestic economy pick up the slack. In Q1 2024, domestic occupiers intensified their demand, contributing approximately 53% to the gross leasing activity. This remains in line with the trend being observed over the past 2 years where domestic occupiers have consistently gone toe to toe with their global counterparts in space acquisition. Moreover, this highlights the resilience and adaptability of India's office market,” said Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL

Delhi NCR and Bengaluru emerged as frontrunners in the market, accounting for 26.6% and 20.4% of the overall gross leasing in Q1 2024, respectively. Chennai continued its strong showing, following up from the momentum witnessed in 2023, contributing to a significant 17.6% share of the overall leasing. Mumbai and Pune followed with gross leasing figures of 2.11 million sq. ft and 1.81 million sq. ft, respectively. 

Source: Real Estate Intelligence Service (REIS), JLL Research

This positive trajectory will be primarily driven by the entry of new Global Capability Centers (GCCs) into the country, as well as the expansion of operations for existing GCCs across all key and emerging technology segments. Furthermore, India's favorable manufacturing policies are predicted to attract even more strongly high-end research and development (R&D) work, further stimulating demand in the office market. The momentum of flex space operators amidst a likely revival in tech outsourcing as global market conditions improve are also expected to play a key role in taking India’s office market to greater heights in 2024 and beyond. 

*Gross leasing refers to all lease transactions recorded during the period, including confirmed pre-commitments, but does not include term renewals. Deals in the discussion stage are not included.

**Net absorption is calculated as the new floor space occupied less floor space vacated. Floor space that is pre-committed is not considered to be absorbed until it is physically occupied.

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