Mumbai: Demand momentum is intensifying for office spaces across key property markets with both leasing tenures and volumes setting new standards, reflecting the growing confidence of occupiers in India’s growth story.

The longer tenure of leases is al- so an indication of leading multi- national companies enhancing their long-term commitment while setting up offices in the country.

The Indian office market has re corded the longest weighted average lease term of 62 months in the last 14 months until February, which is the highest ever in the segment. Prior to this, the average leasing period had peaked at 59 months in 2018 and 2022, according to a joint study of Credai and CRE Matrix.

The rising tenure of lease trans- actions reflects the increasing prowess of India’s commercial segment and a robust supply of grade A and A+ offices that are being sought after by international companies and global capability centres (GCCs).

“The Indian office space sector has been setting new benchmarks in terms of both leasing volumes and tenures, as India’s macro-economic indicators remain healthy enough for international organisations and investors to bet big on,” said Boman Irani, president, Credai. “We expect this year to be no different, as we see more and more entities coming to India to set up shop and contribute towards the robusteconomic growth of our country.”

According to Irani, both demand and supply for office spaces are expected to go beyond tier-1 cities and expand into tier-2 and 3 as well.

“Trends are changing across the demand and supply landscape of office leasing,” said Abhishek Ki- ran Gupta, CEO, CRE Matrix. “On the supply side, younger cities and newer macro-markets in established cities are witnessing high demand from occupiers. On the demand side, GCCs are signinglonger leases as the global BFSI leaders see India as part of their central strategy.”

According to Gupta, startups and even large Indian occupiers are embracing co-working like never before, and the managed space segment is currently drivingalarge chunk of co-working demand. He expects the co-working segment to contribute at least 15% to total office demand this year.

The weighted average tenures of the top five large transactions across India in 2023 stood at 180 months as against 112 months in 2022, a 61% increase. The growth in commitment can be attributed to occupiers showing confidence that India’s growth story is a long- term play and not just a fad.

Source- The Economic Times

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