In a remarkable contrast to the global slowdown in commercial real estate, India’s office rental market has emerged as a strong outlier, recording historic highs in office space leasing and sustained rental growth in 2024, according to a recent report by real estate services firm Vestian.
The country witnessed its highest-ever office space leasing last year, touching 70.7 million sq ft — a 16% jump from 2023 levels. This growth comes at a time when major global cities such as New York, Seattle, Boston, Hong Kong, and Shanghai are experiencing declining office rents due to rising vacancy rates and evolving workplace dynamics.
Vestian attributes India’s continued momentum to a combination of factors — robust demand from IT and Global Capability Centers (GCCs), competitive rental rates, a growing economy, and ongoing infrastructure development across key metros.
“The Indian office market is witnessing a unique growth cycle, largely driven by the influx of global companies looking for cost-effective, scalable, and talent-rich locations,” said Shrinivas Rao, CEO of Vestian.
| City | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|---|
| Mumbai | 1.5 | 1.5 | 1.4 | 1.4 | 1.5 | 1.6 |
| Delhi | 0.8 | 0.8 | 0.8 | 0.8 | 0.8 | 0.9 |
| Bengaluru | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.1 |
| Pune | 0.9 | 0.8 | 0.8 | 0.9 | 0.9 | 1.0 |
| Chennai | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 | 0.8 |
| Hyderabad | 0.7 | 0.7 | 0.7 | 0.8 | 0.8 | 0.8 |
| Kolkata | 0.6 | 0.5 | 0.5 | 0.5 | 0.5 | 0.6 |
Sub-Dollar Rentals Drive Growth
India’s top seven cities continued to offer office spaces at sub-dollar rentals, making them attractive for both domestic and international occupiers. Cities like Delhi, Bengaluru, Pune, and Hyderabad saw annual rental increases between 9.8% and 13.9% in 2024. Mumbai remained the highest-priced Indian city in terms of average monthly rent, at USD 1.6 per sq ft.
By comparison, global cities showed mixed results. While London and Miami reported strong five-year rental growth of 31% and 53% respectively, others like Hong Kong (-35.7%), Seattle (-5.5%), and Shanghai (-18.2%) saw significant declines during the same period.
Premium Indian Locations See Strong Demand
Prime Indian business hubs like Mumbai’s Bandra-Kurla Complex (BKC) and Delhi’s Connaught Place continue to command high office rents, averaging between USD 3 to 4 per sq ft per month — a fraction of the cost in comparable Western markets, yet indicative of India’s premium-grade office supply.
A Bright Future Ahead
The Vestian report predicts that India’s commercial real estate sector will maintain its upward trajectory in the coming years, powered by favorable demographics, steady economic growth, and a wave of new infrastructure projects.
As multinational corporations continue to recalibrate their global strategies in the post-pandemic era, India is emerging not just as a back-office hub, but as a global headquarters destination.
“India’s unique advantage lies in its affordability, talent availability, and scale. With demand showing no signs of slowing down, the office market here is poised for a strong decade of growth,” Rao added.
Also Read: Supply Trends – Key Office Markets in India
