New supply of office space in top 7 cities down 4% in Jul-Sep

New supply of office space across seven major cities fell 4 per cent annually in the July-September quarter to 12.8 million square feet while gross leasing of prime workspace rose 17 per cent, according to Vestian.

In its report released on Wednesday, real estate consultant Vestian said the fresh supply of office space in Hyderabad declined 25 per cent in the July-September quarter to 4.10 million square feet.

Bengaluru saw a 33 per cent increase in new supply of office space to 3.60 million square feet, while Delhi-NCR witnessed a 360 per cent increase to 2.3 million square feet.

In Pune, Vestian data showed that new supply decreased 26 per cent to 1.4 million square feet.

The new supply of office space in Mumbai remained flat at 0.90 million square feet during the July-September period.

In Chennai, the fresh supply declined 58 per cent annually to 0.5 million square feet during the July-September period of 2024, calendar year.

There was no fresh supply of Grade-A office space in Kolkata during the third quarter of the current calendar year, Vestian report showed.

On the demand side, Vestian said the gross leasing of office space increased 17 per cent annually to 18.61 million square feet across these seven cities.

In Bengaluru, the leasing of office space surged by 84 per cent to 6.63 million square feet.

Pune saw a 112 per cent growth in demand to 2.33 million square feet, while the leasing activities in Chennai remained flat at 2.01 million square feet.

The leasing activities fell in Hyderabad by 25 per cent to 2.79 million square feet.

Mumbai too saw a 2 per cent dip to 2.25 million square feet.

The absorption or leasing of office space in Delhi-NCR declined 17 per cent to 2.49 million square feet.

Kolkata saw a 45 per cent decline in leasing of office space to 0.11 million square feet during July-September 2024 from a year-ago period, the Vestian data showed.

The consultant noted that the BFSI and flexible spaces operators emerged as key demand drivers for office spaces.

"These sectors account for 39 per cent of the pan-India absorption in Q3 2024, an increase of 20 per cent from the previous quarter.

"Conversely, the share of the IT-ITeS sector declined from 38 per cent in Q2 2024 to 23 per cent in Q3.

"This demand shift may alter the demand-supply dynamics across the country," Vestian said.