India’s Office Leasing Market Reaches Record 81.7 MSF In 2024; IT Sector Leads Growth

India’s office leasing market hit an all-time high in 2024, reaching 81.7 million square feet (MSF), a 19% year-on-year (YoY) increase, according to a report by CRE Matrix and CREDAI.

The IT/ITES sector dominated demand, accounting for 42% of total leasing, up from 28% in 2023.

Top metros, including Bengaluru, Hyderabad, and Mumbai, led the market, contributing 62% of total leasing with a 20% YoY growth.

Large transactions above 100,000 sqft made up 41% of total demand, particularly in Bengaluru and Pune.

A high demand-to-supply ratio of 1.5 led to lower vacancy rates across Delhi NCR, Mumbai, and Chennai, reducing the Pan-India vacancy rate to 15.7%, down from 17.7% in 2023.

In Q4 2024, demand stood at 17.9 MSF, while supply was 12.1 MSF.

The co-working segment saw a 30% increase, contributing 13 MSF to total office leasing, up from 10 MSF over the past three years.

Delhi NCR’s co-working demand doubled, while Bengaluru’s grew by 1.4 times.

Office rentals rose 13% YoY to ₹106 per square foot, with Hyderabad, Pune, and Mumbai leading the surge.

Despite a 19% decline in new office completions, India crossed 900 MSF of Grade A office stock. Bengaluru and Hyderabad contributed 55% of new supply.

India expects 295.7 MSF of fresh Grade A office space by 2027. IT/ITES led leasing with 42%, followed by co-working (16%) and BFSI (12%).

Peush Jain, MD-Commercial Leasing and Advisory at ANAROCK Group, called 2024 a transformative year for office real estate. He highlighted GCC expansion, BFSI leasing growth, and increased demand for premium office spaces as key drivers of the market shift.

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