Office leasing market in India sees 14 pc growth in 2024, Bengaluru leads

The office market in India saw a robust 14 per cent growth (year-on-year) in 2024, with leasing activity across the top six cities reaching 66.4 million square feet, according to a report on Tuesday.

Bengaluru led the Grade A office space demand, with highest-ever leasing volume of 21.7 million square feet, marking an impressive 40 per cent growth, according to a Colliers report.

Demand scale-up was also evident in Hyderabad and Mumbai. With 12.5 and 10.0 million square feet of leasing activity respectively, both cities witnessed double-digit annual office space demand for the first time in 2024.

Delhi-NCR too witnessed healthy space uptake and Grade A demand almost touched 10 million square feet mark in 2024.

“New supply during the year also remained above the 50 million sq feet mark and kept vacancy levels rangebound. 2025 demand can potentially stabilise at elevated levels and annual space uptake exceeding 60 million sq feet is likely to be the new norm over the next few years,” explained Arpit Mehrotra, Managing Director, Office services, India, Colliers.

The fourth quarter (Q4) 2024 saw the highest leasing during the year, at 19.7 million square feet, a 14 per cent increase over the previous quarter.

At 4.7 million square feet, flex spaces saw their highest ever quarterly leasing. The flex space demand accounted for 24 per cent of the Grade A space uptake in Q4 2024.

While technology sector continued to drive annual office space demand with almost one-fourth share in overall leasing, flex spaces accounted for almost one-fifth of the Grade A space uptake in 2024. BFSI and engineering and manufacturing sectors too demonstrated healthy leasing activity, both crossing the 10 million square feet leasing this year.

“The occupier preference for managed office spaces augurs well for leading operators, who are likely to increasingly foray into tier 2/3 cities throughout 2025 and expedite their fund-raising plans through primary markets as well,” said Vimal Nadar, Senior Director and Head of Research, Colliers India.

On the supply side, Q4 2024 witnessed 15.9 million sq feet of new completions, pushing the total to 53.3 million sq feet for the year, said the report.

(With inputs from IANS)