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Business Standard
4 days ago
- Business
- Business Standard
Net office leasing in top 6 cities likely to sustain at record levels: ICRA
Rating agency ICRA on Thursday said net leasing of office space in the top six cities rose 14 per cent to 65 million sq ft last fiscal and the demand is likely to sustain during 2025-26. In a statement on Thursday, ICRA said it expects the net absorption or leasing of office space in 2025-26 across the top six cities (Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai Metropolitan Region (MMR) and Pune) to sustain at all-time high levels witnessed in the preceding year. The demand is driven by Global Capability Centres (GCCs), Banking, Financial Services and Insurance (BFSI) institutions, flex-space operators, and domestic Information Technology-Business Process Outsourcing (IT-BPM) firms. Quoting data of PropEquity, ICRA said that the net absorption stood at a record 65 million square feet in 2024-25 (14 per cent YoY growth) across India's top six cities. In the April-June quarter of this fiscal, 17 million sq ft of office spaces have been absorbed.
News18
4 days ago
- Business
- News18
Net office leasing in top 6 cities likely to sustain at record levels: ICRA
Agency: PTI Last Updated: New Delhi, Aug 7 (PTI) Rating agency ICRA on Thursday said net leasing of office space in the top six cities rose 14 per cent to 65 million sq ft last fiscal and the demand is likely to sustain during 2025-26. In a statement on Thursday, ICRA said it expects the net absorption or leasing of office space in 2025-26 across the top six cities (Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai Metropolitan Region (MMR) and Pune) to sustain at all-time high levels witnessed in the preceding year. The demand is driven by Global Capability Centres (GCCs), Banking, Financial Services and Insurance (BFSI) institutions, flex-space operators, and domestic Information Technology-Business Process Outsourcing (IT-BPM) firms. Quoting data of PropEquity, ICRA said that the net absorption stood at a record 65 million square feet in 2024-25 (14 per cent YoY growth) across India's top six cities. view comments First Published: August 07, 2025, 17:45 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Time of India
4 days ago
- Business
- Time of India
India's office leasing record pace poised to continue in FY26
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India's commercial office market has witnessed a landmark year in fiscal year 2025, with office leasing hitting record levels and the momentum is expected to sustain in FY2026, driven by sustained demand from key sectors such as Global Capability Centres (GCCs), Banking, Financial Services and Insurance (BFSI) institutions, flexible workspace operators, and domestic Information Technology-Business Process Outsourcing (IT-BPM) firms, said ratings agency ICRA ..The net absorption of commercial office space across the top six cities—Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai Metropolitan Region (MMR), and Pune—reached a record high of 65 million sq ft in FY2025, a growth of 14% year-on-year. This surge in demand surpassed the 58 million sq ft of supply for the year, indicating strong pace of growth.'The momentum has carried into the first quarter of FY2026, with 17 million sq ft of net absorption, nearly matching the supply of 17.7 million square feet. ICRA expects this trend to continue in FY2026, with net absorption levels remaining strong and vacancy levels projected to decline further to 13.0–13.5% by March 2026 from all-time low levels of 13.9% as of March 2025 and 15.5% as of March 2024, reflecting strong fundamentals.' said Abhishek Lahoti, Assistant Vice President and Sector Head, Corporate Ratings at of the major trends highlighted by the ratings agency is the shift in leasing activity, with the slowdown in leasing from global IT firms being more than compensated by the growing demand from GCCs and BFSI segments. ICRA expects these sectors to continue driving leasing activity and to account for the majority of space uptake in of June end, the total Grade A office stock across the six major office markets stood at alround 1,030 million sq ft with Bengaluru having the highest share of 26%, followed by Delhi-NCR and MMR. The supply for FY2026 is estimated at approximately 63–64 million sq vacancy trends suggest a healthy outlook for the upcoming year: Bengaluru is expected to see a decline in vacancy rates, from 9.8% to 9.0–9.5% despite 16.5 million sq ft of new is likely to maintain a stable vacancy rate of 9.0-9.5% despite an additional 5 million sq ft of supply. Delhi-NCR is projected to see a slight easing in vacancy rates, from 22.4% to 21.5–22.0%, with 12 million sq ft of new supply, the ratings agency is expected to maintain steady vacancy rates of around 17.5-18.0% with 15.5 million sq ft of new space. Mumbai Metropolitan Region (MMR) and Pune are expected to see a decline in vacancy rates, reflecting strong net absorption and sustained demand in these analysis also points to a positive outlook for the credit profile of office players, with a stable growth trajectory in net operating income (NOI) driven by higher rentals. As a result, the leverage metrics, measured by debt-to-NOI, are expected to improve, falling to a range of 5.0x–5.5x by March 2026, down from 6.0x in with the reduction in interest rates and a rise in NOI, debt service coverage ratio (DSCR) is projected to improve and remain healthy, reaching 1.35x–1.40x in FY2026, compared to 1.3x in conclusion, India's office leasing market is poised to continue its growth trajectory, with strong demand from key sectors and positive financial metrics expected to drive further expansion in FY2026.
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Business Standard
07-07-2025
- Business
- Business Standard
Gross office space leasing soars 5% in Q2 of 2025: Cushman & Wakefield
Fuelled by the global capability centre (GCC) boom, gross leasing of office space across top eight cities soared 5 per cent to touch 21.4 million square feet (msf) in the second quarter of calendar year 2025, according to Cushman & Wakefield's Q2 India Office Market report. GCCs contributed 24 per cent of Q2 leasing at 5.1 msf, led by Bengaluru and Pune. H1 2025 saw a record 11.4 msf in GCC leasing, driven by IT-BPM and E&M. IT-BPM remained the top occupier with 34 per cent of Q2 demand, followed by flex operators (18 msf) and BFSI and Engineering and Manufacturing sectors. 'The GCC segment continues to be a key driver of demand, contributing a record 27 per cent of total leasing in H1. These centres are maturing in complexity and scale, and India's deep talent pool and improving infrastructure continue to reinforce its positioning as a global hub. At the same time, we are seeing more diverse sources of demand from domestic corporates, financial institutions, and flex players. We expect this momentum to continue, buoyed by easing inflation, expected rate cuts, and the continued evolution of India as a strategic business location,' said Anshul Jain, chief executive, India, SEA & APAC Tenant Representation, Cushman & Wakefield. With total leasing in the first half of the year at approximately 42 million square feet, the sector is on pace to exceed 90 million square feet in annual activity, potentially setting a new record. The strong leasing figures underscore sustained demand from both global and domestic occupiers, led by GCCs, IT-BPM firms, flex space operators, BFSI, and engineering and manufacturing companies. 'India's office market continues to outperform global peers, underpinned by a solid economic outlook and long-term occupier confidence. Our forecast of more than 90 million square feet of gross leasing this year reflects the sector's structural strength, particularly as we see sustained growth in key industries such as technology, BFSI, and engineering,' Jain said. Cushman & Wakefield noted that this momentum builds on 2024's historic performance of approximately 89 million square feet, with H1 2024 figures largely in line with this year's. With continued momentum, 2025 will mark the second consecutive year of over 85 million square feet in gross leasing, signalling the establishment of a new baseline for market performance. In terms of cities, Bengaluru (5.0 msf), Delhi NCR (4.6 msf), and Mumbai (3.9 msf) accounted for approximately 63 per cent of the total quarterly leasing volume. The remaining share came from Pune (3.3 msf), Chennai (2.2 msf), Hyderabad (1.7 msf), Kolkata (0.5 msf), and Ahmedabad (0.2 msf). Furthermore, net absorption reached 13.5 msf in Q2 2025, up 19 per cent year-on-year, totalling 27.8 million square feet in H1. Delhi NCR, Pune, and Chennai recorded their highest-ever half-yearly absorption, signalling strong long-term occupier confidence. Fresh leases made up 77 per cent of H1 2025 activity, continuing a trend since 2022. Pre-commitments rose to 10 per cent, indicating tightening supply and rising occupier urgency. On the supply side, India's top eight office markets recorded 12.5 msf of new completions in Q2, marking a 53 per cent year-on-year and 17 per cent quarter-on-quarter rise. H1 2025 supply totalled 23.2 msf, a 14 per cent increase year-on-year, with Bengaluru and Pune accounting for over 60 per cent. Pune led with 4.8 msf in Q2, its highest half-year supply to date. 'The growth is being fuelled by a convergence of trends, expansion of existing occupiers, rapid scaling of GCCs, and entry of new domestic and global firms. But supply is lagging in core locations, creating a landlord's market. Occupiers looking for high-quality space need to act early, especially as pre-commitments are on the rise and rentals are climbing in prime markets,' said Veera Babu, Executive Managing Director, Tenant Representation, Cushman & Wakefield.
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Business Standard
07-07-2025
- Business
- Business Standard
Office market set for record gross leasing of over 90 msf in 2025: Report
India's office real estate market maintained its growth momentum in the second quarter of 2025, with gross leasing volume (GLV) across the top eight cities reaching 21.4 million square feet—a 5 per cent increase quarter-on-quarter (q-o-q)—according to Cushman & Wakefield's Q2 India Office Market report. With total leasing in the first half of the year at approximately 42 million square feet, the sector is on pace to exceed 90 million square feet in annual activity, potentially setting a new record. The strong leasing figures underscore sustained demand from both global and domestic occupiers, led by Global Capability Centres (GCCs), IT-BPM firms, flex space operators, BFSI, and engineering and manufacturing companies. Anshul Jain, chief executive, India, SEA & APAC Tenant Representation, Cushman & Wakefield, said: 'India's office market continues to outperform global peers, underpinned by a solid economic outlook and long-term occupier confidence. Our forecast of more than 90 million square feet of gross leasing this year reflects the sector's structural strength, particularly as we see sustained growth in key industries such as technology, BFSI, and engineering.' Cushman & Wakefield noted that this momentum builds on 2024's historic performance of approximately 89 million square feet, with H1 2024 figures largely in line with this year's. With continued momentum, 2025 will mark the second consecutive year of over 85 million square feet in gross leasing, signalling the establishment of a new baseline for market performance. In terms of cities, Bengaluru (5.0 million sq ft), Delhi NCR (4.6 million sq ft), and Mumbai (3.9 million sq ft) accounted for approximately 63 per cent of the total quarterly leasing volume. The remaining share came from Pune (3.3 million sq ft), Chennai (2.2 million sq ft), Hyderabad (1.7 million sq ft), Kolkata (0.5 million sq ft), and Ahmedabad (0.2 million sq ft). Furthermore, net absorption reached 13.5 million square feet in Q2 2025, up 19 per cent year-on-year, totalling 27.8 million square feet in H1. Delhi NCR, Pune, and Chennai recorded their highest-ever half-yearly absorption, signalling strong long-term occupier confidence. Fresh leases made up 77 per cent of H1 2025 activity, continuing a trend since 2022. Pre-commitments rose to 10 per cent, indicating tightening supply and rising occupier urgency. GCCs contributed 24 per cent of Q2 leasing at 5.1 million square feet, led by Bengaluru and Pune. H1 2025 saw a record 11.4 million square feet in GCC leasing, driven by IT-BPM and engineering and manufacturing. IT-BPM remained the top occupier with 34 per cent of Q2 demand, followed by flex operators (18 per cent), BFSI, and engineering and manufacturing sectors. 'The GCC segment continues to be a key driver of demand, contributing a record 27 per cent of total leasing in H1. These centres are maturing in complexity and scale, and India's deep talent pool and improving infrastructure continue to reinforce its positioning as a global hub. At the same time, we are seeing more diverse sources of demand from domestic corporates, financial institutions, and flex players. We expect this momentum to continue—buoyed by easing inflation, expected rate cuts, and the continued evolution of India as a strategic business location,' added Jain. On the supply side, India's top eight office markets recorded 12.5 million square feet of new completions in Q2, marking a 53 per cent year-on-year and 17 per cent q-o-q rise. H1 2025 supply totalled 23.2 million square feet, a 14 per cent increase year-on-year, with Bengaluru and Pune accounting for over 60 per cent. Pune led with 4.8 million square feet in Q2, its highest half-year supply to date. 'The growth is being fuelled by a convergence of trends—expansion of existing occupiers, rapid scaling of GCCs, and entry of new domestic and global firms. But supply is lagging in core locations, creating a landlord's market. Occupiers looking for high-quality space need to act early, especially as pre-commitments are on the rise and rentals are climbing in prime markets,' said Veera Babu, Executive Managing Director, Tenant Representation, Cushman & Wakefield. Tight vacancy rates, due to demand outpacing supply, are driving rent growth, especially in Hyderabad and Mumbai, where rents rose 15–16 per cent year-on-year. Gross Leasing Volume (MSF) Q2 2024 Q1 2025 Q2 2025 Q-O-Q % Change Y-O-Y % Change Mumbai 4.5 4.3 3.9 -9% -13% Delhi NCR 3.5 2.8 4.6 68% 31% Bengaluru 5.5 4.9 5 2% -10% Chennai 1.7 2 2.2 10% 25% Pune 2.9 3.5 3.3 -6% 13% Hyderabad 2.3 2.6 1.7 -33% -24% Kolkata 0.8 0.3 0.5 103% -34% Ahmedabad 0.3 0.1 0.2 130% -36% PAN India 21.6 20.3 21.4 5% -1%
