India’s Business Boom: Front Office Leasing Surges Amid Corporate Confidence

India’s prime business districts, particularly in Mumbai, Bengaluru, and Hyderabad, are witnessing a surge in demand for premium office spaces, driven by growing corporate confidence and long-term commitment. Leasing activity has intensified, with rents steadily increasing in core central business districts (CBDs).

 

Key Highlights:

Strategic Leasing Growth: Companies are locking in prime real estate in Bandra-Kurla Complex (Mumbai), Richmond Road (Bengaluru), and MG Road (Bengaluru), with rental values rising at a compound annual growth rate (CAGR) of 5.4% to 9.3%.

 

India’s Headquarters Economy: The country is evolving beyond a back-office hub, with multinational corporations, BFSI leaders, and consulting firms establishing front-office operations in city centers.

 

Declining Vacancy Rates: Over 100 million sq ft of Grade A office stock in Mumbai, Delhi NCR, Bengaluru, and Hyderabad has seen rising absorption levels, reflecting strong occupier interest.

 

Rental Escalations: Monthly rentals in Mumbai’s Lower Parel have reached ₹280-₹300 per sq ft, while BKC rents have surged to ₹400-₹440 per sq ft, driven by financial institutions and e-commerce firms.

 

New Supply Pipeline: Developers are responding to demand, with completed stock in CBDs of Bengaluru, Hyderabad, and Mumbai’s Lower Parel growing at a CAGR of 4.5% to 5.2% since 2022.

 

This leasing momentum signals India’s transformation into a global business powerhouse, with companies prioritizing talent access and strategic presence over cost efficiency.

 

Source: Economic Times