Southern India is at the forefront of the anticipated recovery in the nation’s office property market, with key metropolitan areas such as Bengaluru, Hyderabad, and Chennai expected to account for nearly 60% of the total office space demand by the end of 2025.
This insight comes from a recent report by real estate management firm Jones Lang LaSalle (JLL). In the first quarter of 2024, the demand for new office space reached approximately 30 million square feet, with Bengaluru alone accounting for about 44% of this demand. According to JLL, these three southern cities collectively represented more than 66% of the active requests for proposals (RFPs) for 29-30 million square feet across India during the January-March period of 2024. Experts highlight a resurgence in demand for large office spaces in 2024, driven by major companies such as QuessCorp, Morgan Stanley, Google, and Amazon.
The past two years saw a decline in office space demand due to the rise in remote work and corporate cost-cutting measures. However, the gradual return to office has led to increased market demand, with builders and consultants noting a surge in the need for extensive floor space from GCC clients.
Bengaluru, Hyderabad, and Chennai are projected to dominate both the demand and supply of office properties. These cities are anticipated to contribute over 58% of the total demand and around 61% of the supply in 2024 across major markets. JLL’s projections indicate that net absorption is expected to be around 45.1 million square feet, while supply is forecasted to reach 53.6 million square feet for 2024.
This resurgence underscores the vital role of southern India’s metros in revitalising the office property market. With strategic investments and increasing occupancies, these cities are well-positioned to lead the sector’s growth, reaffirming their status as key hubs in the global office landscape.
“Office demand for the three prime south India markets of Bengaluru, Hyderabad and Chennai has been quite robust and moving from strength to strength,” said Samantak Das, chief economist and head of research and REIS, India, JLL. “The tech sector is strong in these cities, and the global capability centres (GCCs) have been driving office leasing activities significantly, particularly in Bengaluru and Hyderabad. The share of south cities is poised to maintain a slightly higher share in the coming two years.”
