Work from home is no longer preoccupied with the office market in India; strong premium demand: Head C&W India

New Delhi, May 17 (PTI) Demand for premium office space in major cities is likely to cross 70 million sq ft this year and next as working from home is no longer a concern for India’s commercial real estate market , said Cushman & Wakefield India Head Anshul Jain.

Cushman & Wakefield, one of the leading global real estate consultants, is bullish on the Indian office market, driven by strong demand from global capacity centers (GCCs) and domestic companies in major sectors.

In an interview to PTI Videos, Jain, Executive Director, India & South East Asia and Head of Tenant Representation Asia Pacific, Cushman & Wakefield, said, “India is now being called the Office of the World interestingly. And the demand in India is one. among the highest in Asia and indeed in the rest of the world’. India’s office market in seven major cities is witnessing very strong demand, with both gross and net rentals reaching pre-Covid levels, he said.

“So from an office market perspective, with the exception of 2020 of course and maybe some of 2021, 2022 and 2023 were very strong years and we expect 2024 to continue to be an exceptionally strong year,” he said Jain.

Asked about the demand outlook for 2024, Jain said, “Gross leasing activity in India will continue to exceed 70 million square feet this year. And I see the same trend happening in the next few years.” According to Cushman & Wakefield data, gross office leasing in the top 8 cities stood at a record 74.6 million square feet, while net office space leasing was 41.1 million square feet during the year calendar year 2023.

The highest net absorption was recorded in 2019 at approximately 44 million square meters.

Elaborating further on office demand, Jain noted that there is huge demand from new global capacity centers (GCCs), he said, adding that demand is also high from startups.

“India is the third largest startup community in the world. Startups mature, they become unicorns, so they need some sort of organized space for their staff and they scale very quickly,” said Jain.

Demand also comes from healthcare, pharma, engineering and manufacturing, in addition to co-working office operators, which also contribute over 10% of total leasing demand.

“US firms continue to dominate demand. 65% of India’s demand for organized office space actually comes from US companies. So there is quite strong momentum, which gives us confidence that gross leasing volumes will continue above 70 million. square meters,” he said.

On whether “working from home” is still a cause for concern, Jain said, “Not at all. I think I’m completely over that phase.” Recently, he said, “I read an article in one of the newspapers where I read that Cognizant has finally given a dictation to their people to go back to the office. So even the last of the companies that resisted going back to the office are going back to the office and that’s the interesting part, right. Jain noted that headcount for most of these multinationals is significantly higher than 2019 levels.

“Most of these firms have very similar property portfolios to what they had in 2019. So while working from home is certainly over, some level of hybrid is here to stay. But on average, the number of employees increased by 50 to 60 percent. But even with some level of hybrid, most firms are running out of space…,” he said.

Jain also pointed out that companies are focusing a lot on the environment and sustainable elements while looking for office space. PTI MJH DR