India's office market was very active in 2024 with gross leasing of workspace witnessing a 19 per cent increase to a record 885.2 lakh square feet across eight major cities, according to Cushman & Wakefield.
The gross leasing or absorption of office space stood at 745.6 lakh square feet in the preceding year, data from real estate consultant Cushman & Wakefield (C&W) showed.
"The year 2024 has been a defining year for India's office sector, achieving record-breaking leasing volumes and reaffirming the country's position as the strongest growth market globally for office space demand," said Anshul Jain, chief executive, India, Southeast Asia and APAC Tenant Representation, Cushman & Wakefield.
The growing presence of Global Capability Centers (GCCs), contributing nearly 30 per cent of total demand, underscores India's strategic importance for global multinationals, he highlighted.
"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," Jain predicted.
Gross leasing volume, which factors in all leasing activity in the market including fresh take-up, open market renewals by corporates as well as pre-leasing, is an indication of overall market activity, the consultant explained.
Among eight major cities, Bengaluru saw a 64 per cent rise in gross leasing to 259.3 lakh square feet in 2024, from 158.3 lakh square feet in the preceding year.
Gross leasing in Mumbai increased 27 per cent to 178.4 lakh square feet from 140.8 lakh square feet.
Hyderabad saw a 37 per cent rise in gross leasing to 123.1 lakh square feet in 2024, from 90.1 lakh square feet in 2023, while Ahemdabad witnessed a 11 per cent increase to 18.1 lakh sq ft from 16.3 lakh sq ft.
Delhi-NCR, Chennai and Pune registered a decline in office demand, while the Kolkata market was stable.
In Delhi-NCR, the gross office leasing fell 3 per cent to 131.4 lakh square feet, from 135.7 lakh square feet.
In Pune, the gross leasing stood at 84.7 lakh square feet in 2024, down 13 per cent from 97.4 lakh square feet in 2023.
Kolkata saw a stable office space absorption at 17 lakh square feet during both 2024 and the preceding calendar year.
Information Technology and Business Process Management (IT-BPM); engineering & manufacturing; and Banking, Financial Services and Insurance (BFSI) sectors were the major drivers of office demand.
Out of the total gross leasing, coworking operators took on rent 14 per cent of workspaces from property owners for further sub-renting to corporates of various sectors.
Commenting on the report, Vinod Rohira, MD and CEO of Mumbai-based K Raheja Corp, said the commercial real estate sector in 2024 has seen record-breaking leasing volumes and a significant reduction in vacancy rates.
"All key cities which have a focus on infrastructure, have seen growth. The interesting part is that large domestics are also now contributors to the demand in these markets," he said.
Looking ahead, Rohira expects continued robust demand for Grade A plus office space.
Peush Jain, MD-Commercial Leasing and Advisory, Anarock Group, said "India's growing economic influence has not just attracted global companies but also inspired domestic companies to expand aggressively. A key trend has been the 'flight to quality'," he said.
Businesses and tenants are classifying and opting for Grade-A office spaces that offer in-trend amenities, wellness features, and ESG compliance, Jain noted.
"Landlords, in turn, have also been raising the bar by rebuilding older properties and launching new projects designed to meet the progressing needs of occupiers," Jain said.
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