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 Led by global capability centres (GCCs), office space transactions in India reached 19 million square feet in the July-September period (Q3) -- an 18 per cent year-on-year increase, a report showed on Thursday. 

This is the highest quarterly absorption since Q1 2018. The year has already registered leasing of 53.7 million square feet, 27 per cent higher YoY, in the first nine months of the year -- set to breach a fresh annual high, according to the report by Knight Frank India.

GCCs accounted for 7.1 million square feet or 37 per cent of the transacted volume during Q3 2024, while India facing businesses took up 6.6 million square feet or 35 per cent of the transacted volumes.

India's sustained economic growth is driven by strong business performance, and the positive sentiment is clearly reflected in the strength of the office market.

“India-facing businesses and GCCs have continued to expand operations, remaining the primary drivers of increased volumes. We expect this trend to continue for the rest of the year, with the possibility of office leasing numbers crossing 70 million square feet by the end of 2024, a 20 per cent growth over the previous high,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

The strong demand in office market reflects the confidence of businesses focused on the Indian economy amid ongoing growth while the increased interest from GCCs highlights global enterprises' high commitment to the Indian business environment.

Bengaluru office market recorded the highest volume of transactions at 5.3 million square feet and constituted 28 per cent of the office volume transactions across eight cities in the country.

India facing businesses, which have traditionally anchored the market, accounted for 35 per cent of the transacted volumes in Q3.

Flex space operators accounted for 16 per cent of the total transacted volume. Volumes taken up by third-party IT services have trended up well in 2024, said the report.