Bengaluru Leads with Historic Growth in Leasing Activity and Net Absorption
India’s office market has achieved a groundbreaking milestone in 2024, registering a record 49.56 million square feet (sq. ft.) in net absorption, marking a historic high. The year culminated with an extraordinary fourth quarter (October-December 2024), which saw net absorption hit 18.53 million sq. ft., the highest ever recorded in a single quarter.
The performance of India’s top seven cities—Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, and Pune—was exceptional, with Bengaluru maintaining its market-leading position. The city saw its best-ever net absorption of 14.74 million sq. ft. in 2024, reflecting a remarkable 63.6% year-on-year growth. Other key cities also posted impressive growth, with Delhi NCR and Hyderabad recording net absorption increases of 30.3% and 6.1%, respectively.
In total, the four leading cities—Bengaluru, Delhi NCR, Hyderabad, and Mumbai—accounted for 77.8% of the national net absorption in 2024. The surge in leasing activity underscores a strong demand for office spaces, particularly driven by global companies expanding their presence in India.
Record Leasing Volumes and Robust Occupier Demand
The Indian office market also saw record-breaking leasing activity in 2024, with gross leasing volumes reaching 77.22 million sq. ft., a 22.6% year-on-year increase. Global companies played a significant role in driving this growth, accounting for 58.6% of the leasing activity. Global Capability Centres (GCCs) emerged as a major contributor, securing around 28 million sq. ft., representing 35.9% of the leasing volumes.
The fourth quarter of 2024 saw the highest ever gross leasing volume in a single quarter, with 23.80 million sq. ft. leased. Bengaluru led this performance, with 7.87 million sq. ft. leased in Q4, followed by Delhi NCR, Hyderabad, and Mumbai. This surge in leasing was further driven by the rising demand for flexible workspaces, which saw leasing activity in this segment jump by 50% year-on-year.
Bengaluru’s Dominance in the Market
Bengaluru’s dominance in India’s office market was evident in both quarterly and annual figures. In Q4, the city accounted for 36.1% of the total net absorption, with a record-breaking 6.69 million sq. ft. absorbed. Its total net absorption for 2024 was 14.74 million sq. ft., a 63.6% increase from the previous year. Other cities, such as Delhi NCR, Hyderabad, and Mumbai, also saw robust growth, but Bengaluru continued to lead in both net absorption and gross leasing.
Vacancy Rates Decline
The vacancy rate across the top seven cities dropped to a three-year low of 16.3%, down by 60 basis points quarter-on-quarter. This decline is a result of the historic net absorption figures, supported by a balanced supply of office space. Vacancy rates fell across most cities, with the exception of Pune.
Looking Ahead: Continued Growth on the Horizon
India’s office market is poised for continued growth in the coming years. The expansion of GCCs, driven by a focus on AI, emerging technologies, and R&D, will continue to fuel demand for office space in core markets. The growth of flexible workspaces and increasing demand from sectors like financial services, manufacturing, and tech outsourcing will further bolster the market. India’s position as a key hub for global companies, particularly in the areas of talent availability and innovation, positions it for sustained office market success.
With strong performance across major cities and the continued influx of global occupiers, India’s office market is expected to maintain its upward trajectory in 2025 and beyond.
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