Bengaluru will lead office space leasing across the top cities with its highest ever of 21.7 million sq ft, up by 40% annually IN 2024, according to a December 24 report by real estate consultant Colliers.
The top six cities in India will lease 66.4 million sq ft, which corresponds to a strong 14% growth year over year in leasing activity.
The report added that Hyderabad and Mumbai are likely to record 12.5 and 10.0 million sq ft of leasing activity, respectively, with both cities witnessing double-digit annual office space demand for the first time in 2024.
“After witnessing higher space uptake in successive quarters, Grade A office space demand in India has broken all records and registered 66.4 million sq feet of activity in 2024. Three out of the six major cities witnessed more than 10 million sq ft of annual leasing. New supply during the year remained above the 50 million sq feet mark and kept vacancy levels rangebound. 2025 demand can potentially stabilize at elevated levels, and annual space uptake exceeding 60 million sq feet is likely to be the new norm over the next few years,โ Arpit Mehrotra, Managing Director, Office Services, India, Colliers said.
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Chennai’s office leasing likely to drop 56% in Q4 2024
The October-December is likely to see the highest leasing during the year, at 19.7 million sq feet, a 14% increase over the previous quarter.
However, Chennai will witness a 56% drop in its leasing activity with 1.9 million sq ft of absorption compared to 4.3 million sq ft a year ago.
Delhi-NCR and Pune will also record a drop in their Q4 leasing by 7% and 35%, respectively. Annually, Chennai and Delhi-NCR will see 35% and 16% drop in their office space leasing.
Hyderabad and Bengaluru will lead the leasing activity during Q4 2024, collectively contributing to 54% of India’s leasing during the quarter.
Among the top six cities, quarterly leasing was highest in Bengaluru at 6.6 million sq ft, and QoQ demand growth was highest in Mumbai and Hyderabad at 71% and 41%, respectively.
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Flex space leasing to touch new quarterly and annual high
At 4.7 million sq feet, flex spaces will see their highest-ever quarterly leasing.
“Interestingly, of all the demand sectors, flex space demand was the highest, accounting for 24% of the Grade A space uptake in Q4 2024. Strong flex activity throughout the year has propelled flex space demand to a record annual absorption of 12.5 million sq feet, a 45% YoY growth,” the report said.
While the technology sector continued to drive annual office space demand, with almost one-fourth of the overall leasing share, flex spaces accounted for almost one-fifth of the Grade A space uptake in 2024. BFSI and the engineering and manufacturing sectors also demonstrated healthy leasing activity, both crossing the 10 million sq feet leasing mark in 2024.
โAnnual flex space leasing has comfortably surpassed the 10 million sq feet mark for the first time, eventually registering Grade A space uptake of 12.5 million sq feet in 2024, a remarkable 45% year-on-year increase. Delhi-NCR, followed by Bengaluru, together accounted for over half of the total flex space leasing during the year. Flex space activity has grown significantly in 2024. Flex operators accounted for almost 20% of the India office space demand in 2024, up from a 5%-15% share in each of the years starting in 2020,โ Vimal Nadar, Senior Director and Head of Research of Colliers India said.
