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India’s office sector achieved a historic gross leasing volume (GLV) of 89 million sq ft in 2024 across the top 8 cities. Net absorption reached an all-time high of 50 million sq ft, a report by Cushman & Wakefield, a real estate consultancy, said.
According to the report, the leasing record in 2024 marks the highest-ever gross leasing GLV recorded in the sector, surpassing 2023’s peak by a significant 14 million sq ft and a 19% increase.
The increase in gross leasing volume was due to factors including fresh take-up, open market renewals by corporates, and pre-leasing. The report said this performance showcases three consecutive years of consistent growth in the office market activity, reinforcing India’s position as the office of the world.
Bengaluru, Mumbai and Hyderabad have the highest leasing
According to the report, Bengaluru, Mumbai, and Hyderabad also recorded the highest-ever leasing volumes in 2024. Bengaluru led the charge, accounting for 29% of India’s GLV at 25.93 million sq ft, followed by Mumbai at 20% with 17.84 million sq ft and Delhi-NCR at 15% with 13.14 million sq ft.
Further, Hyderabad and Pune rounded off the top five cities with shares of 14% at 12.31 million sq ft and 10% at 8.47 million sq ft, respectively.
Net absorption of office spaces
Net absorption, which is a barometer of real demand or expansion of occupied space in the market, was also at a record-breaking 50 million sq ft, surpassing the pre-COVID peak of 2019 by a significant seven million sq ft. Regarding absorption, Bengaluru again topped the list with 14.18 million sq ft, 28% of the total net absorption, a historic high for the city.
The report said Mumbai, at 10.93 million sq ft, Hyderabad, at 8.18 million sq ft, and Delhi-NCR, at 7.06 million sq ft, followed.
Also Read: Year-ender 2024: Office space leasing expected to touch 85 million square feet this year
Supply of Grade A office struggled to keep pace
The report said that despite the strong demand, the supply of Grade A office buildings struggled to keep pace. In 2024, 45 million sq ft of new Grade-A completions were recorded.
This has led to a vacancy rate of 16% in 2024, a drop of 1.8%-2% from last year. Core markets across all major cities have tightened further with increased demand from multinationals. However, 2025 is expected to recover in supply, with a considerable portion of it coming in the suburban markets across key cities, the report said.
The fourth quarter of 2024 was a key contributor to the strong demand, as GLV and net absorption for the quarter stood at 24 million sq ft and 16 million sq ft, respectively. The report stated that the year’s second half accounted for nearly 55-58% of the overall GLV and net absorption.
Also Read: Year Ender 2024: Top 5 commercial lease deals in the Mumbai real estate market
IT-BPM largest contributor
Regarding sectoral performance, the IT-BPM sector was the largest contributor to demand, with nearly 30% share in Q4 2024, followed by Eng. & Mfg. and BFSI sectors with 23% and 16% shares, respectively. The flex sector also contributed to the demand by accounting for ~14% share in GLV.
The report mentioned that 2024 IT-BPM captured a 29% share, Banking and Financial Services Institutions (BFSI), engineering and manufacturing at 17%, and flex space at 14%.
The Global Capability Centres (GCCs) accounted for 27%- 29% of the overall demand for office spaces in 2024, thereby reinforcing their significance for the Indian economy and commercial real estate sector. We have been highlighting the growing significance of GCCs for the office sector in India over the last two to three years.
“2024 has been a defining year for India’s office sector, achieving record-breaking leasing volumes and reaffirming the country’s position. The growing presence of Global Capability Centers, which contributed nearly 30% of total demand, underscores India’s strategic importance for global multinationals. As we move into 2025, the demand for Grade-A spaces is expected to remain robust, further solidifying India’s dominance in the global office market,” Anshul Jain, Chief Executive, India, Southeast Asia and APAC Tenant Representation, Cushman & Wakefield said.
Also Read: Mumbai real estate: WeWork India leases 1.26 lakh sq ft of commercial space in Powai for ₹1.38 crore monthly rent
“2024 has been exceptional, even surpassing our bullish mid-year projections of demand crossing 80 million sq ft. Primary growth drivers such as GCCs, flex, domestic companies, especially in banking and financial services, and manufacturing growth remain intact, and we foresee 2025 carrying forward the positive momentum,” Veera Babu, Managing Director, Tenant Representation, Cushman & Wakefield said.
