India’s office sector market closed in 2024 on a high note, achieving record gross leasing volumes (GLV) of 89 million square feet (MSF) across the top eight cities, according to a Cushman & Wakefield report. This marks a 19% increase compared to 2023 and surpasses the previous peak by 14 MSF.
Consistent Growth Over Three Years
The data highlights three consecutive years of steady growth, cementing India’s reputation as a global hub for office spaces. GLV includes all leasing activity, such as new leases, renewals, and pre-leasing deals, reflecting robust market activity.
City-Wise Performance
Bengaluru led the charge with 29% of the total GLV (25.93 MSF), followed by Mumbai at 20% (17.84 MSF) and Delhi-NCR at 15% (13.14 MSF). Hyderabad and Pune contributed 14% (12.31 MSF) and 10% (8.47 MSF), respectively. Notably, Bengaluru, Mumbai, and Hyderabad recorded their highest-ever leasing volumes in 2024.
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Net Absorption Reaches Record High
Net absorption, which measures the real expansion of occupied office space, hit a record-breaking 50 MSF, exceeding the pre-COVID peak of 2019 by 7 MSF. Bengaluru topped this list with 14.18 MSF of net absorption, followed by Mumbai (10.93 MSF), Hyderabad (8.18 MSF), and Delhi-NCR (7.06 MSF).
Key Drivers Of Demand
The IT-BPM sector was the largest contributor to demand in Q4 2024, accounting for 30% of GLV, followed by engineering and manufacturing (23%), BFSI (16%), and the flex space sector (14%). For the full year, the IT-BPM sector led with 29% of demand, while BFSI and engineering/manufacturing each contributed 17%, and flex spaces accounted for 14%.
Global Capability Centers (GCCs) also played a crucial role, contributing nearly 30% of the total demand, underlining India’s strategic importance for multinational corporations.
Challenges And Outlook For 2025
Despite strong demand, the supply of Grade-A office spaces lagged, with only 45 MSF of new completions in 2024. This mismatch led to a vacancy rate of 16%, down 1.8-2% from 2023. Core markets across major cities tightened due to increased demand from multinationals.
However, the report predicts a recovery in supply in 2025, driven by new developments in suburban markets.
Expert Insights
Anshul Jain, Chief Executive, India and Southeast Asia, Cushman & Wakefield, stated, “The growing presence of Global Capability Centers underscores India’s strategic importance for global multinationals. Demand for Grade-A spaces is expected to stay strong, further solidifying India’s dominance in the global office market.”
Veera Babu, Managing Director of tenant Representation, added, “India’s office market has shown remarkable resilience and growth, with 2024 exceeding even the most optimistic projections of demand crossing 80 MSF.”
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