India’s office market achieved a new milestone in 2024, with leasing activity across the top six cities reaching a record 66.4 million sq ft, marking a 14% year-on-year growth. Bengaluru led the demand for Grade A office spaces, recording an all-time high leasing volume of 21.7 million sq ft, a 39% increase from 2023. Hyderabad and Mumbai also witnessed exceptional growth, surpassing 10 million sq ft of annual leasing for the first time.
Delhi-NCR showed strong demand, nearing 10 million sq ft of leasing activity, while Chennai and Pune recorded relatively subdued growth. Flex spaces emerged as a key driver, with annual absorption reaching an all-time high of 12.5 million sq ft, accounting for 19% of the total space uptake in 2024.
Record-breaking Quarter Boosts Annual Activity
The fourth quarter of 2024 saw the highest leasing activity of the year at 19.7 million sq ft, a 14% quarter-on-quarter growth. Bengaluru and Hyderabad were the top contributors, accounting for 54% of India’s total leasing during Q4. Bengaluru alone recorded 6.6 million sq ft of leasing in Q4, while Mumbai and Hyderabad witnessed the highest QoQ growth at 71% and 41%, respectively.
Arpit Mehrotra, Managing Director, Office Services, India, Colliers, said, “Grade A office space demand has broken all records, with leasing activity reaching 66.4 million sq ft in 2024. Bengaluru accounted for one-third of the total demand, while Hyderabad and Mumbai also achieved double-digit leasing for the first time.”
Sector-wise Performance
The technology sector continued to lead the demand, accounting for 24% of the total leasing activity with 16.3 million sq ft. Flex spaces saw the most significant growth, with a 45% YoY increase, contributing 12.5 million sq ft to the overall demand. BFSI and engineering sectors also showed robust performance, with both crossing the 10 million sq ft mark.
New Supply Keeps Pace
India’s office market added 53.3 million sq ft of new supply in 2024, a 6% increase from the previous year. Bengaluru and Hyderabad accounted for 54% of the new completions, with Mumbai recording an impressive 655% annual growth in new supply. Despite the significant supply, vacancy levels dipped by 80 basis points, while rentals increased by 5%.
Vimal Nadar, Senior Director and Head of Research, Colliers India, noted, “Flex operators accounted for 20% of the total office space demand in 2024, a significant jump from previous years. This trend is likely to expand into Tier-II and Tier-III cities in 2025, driving further growth.”
Looking Ahead
With demand exceeding supply in key markets and a sustained interest in Grade A office spaces, India’s office leasing activity is expected to stabilize at elevated levels. Annual leasing exceeding 60 million sq ft is projected to become the new norm in the coming years.
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