India’s office space demand reached 46.7 million sq ft in the first nine months of 2024, with Bengaluru and Hyderabad leading the leasing activity. Flex spaces and large enterprises drove the surge, while new supply increased by 33% year over year. The tech and BFSI sectors also contributed significantly to the growth.
India’s demand for Grade A office spaces surged in the first nine months of 2024, reaching 46.7 million sq ft across the top six cities, according to a recent report by Colliers. The report highlighted a 23% year-over-year (YoY) growth, with a strong performance in the third quarter (Q3) of 2024 when leasing activity alone accounted for 17.3 million sq ft, representing a 31% YoY increase.
Bengaluru and Hyderabad Lead the Market
Bengaluru and Hyderabad dominated the market, contributing more than half of the total office space leasing. Bengaluru saw its highest-ever quarterly leasing at 6.3 million sq ft, maintaining its leading position in India’s office market. Pune also demonstrated remarkable growth, with 2.6 million sq ft leased, 2.6 times higher than the space in Q3 2023.
“Office demand across different markets and sectors has been impressive in the last 2-3 years, helping overall leasing hit new highs year after year,” stated Arpit Mehrotra, Managing Director of Office Services at Colliers India. “Occupier confidence is reflected in the higher uptake of large-sized deals, with 65% of Q3 2024 leasing comprising deals over 1 lakh sq ft. Bengaluru led this trend with 81% of its leasing in large-sized deals.”
Supply Keeps Pace with Demand
A surge in new supply accompanied the growth in demand. Q3 2024 saw the completion of 14.4 million sq ft of new office spaces, a 33% YoY increase. Bengaluru and Hyderabad again accounted for a significant portion of this, contributing 64% of the new supply. Delhi-NCR also saw a major boost, with 3.3 million sq ft of new space added, marking its highest supply in eight quarters.
Within Delhi-NCR, South Delhi stood out, contributing nearly 70% of the city’s incremental supply in Q3 2024. The supply increase reflects strong market confidence and growing demand for premium office spaces in key Indian cities.
Technology, BFSI, and Flex Spaces Drive Demand
The technology sector accounted for about 25% of the overall office space demand in Q3 2024, followed by the BFSI (Banking, Financial Services, and Insurance) sector and flexible workspace (flex space) operators. Bengaluru and Pune led BFSI leasing, capturing 39% and 25% of the market share, respectively, outperforming Mumbai.
Flex spaces emerged as a major player, with 3.4 million sq ft leased in Q3 2024, accounting for 20% of total office space leasing. “2024 has seen impressive flex space leasing, reaching 7.9 million sq ft—a 20% year-on-year increase,” commented Vimal Nadar, Senior Director and Head of Research at Colliers India. “Delhi-NCR and Bengaluru led the flex space demand, representing 55% of the total leasing in 2024, driven by large enterprises seeking spaces of over 1 lakh sq ft.”
Outlook
With sustained demand from sectors like technology, BFSI, and flex space operators, India’s office market is poised for further growth in the coming months. As the report suggests, large enterprises increasingly opt for expansive office spaces, signalling a robust future for the country’s commercial real estate sector. The growing leasing activity in cities like Bengaluru, Hyderabad, and Pune strongly indicates that the market’s upward trajectory will continue, driven by demand for flexible, large-scale, and high-quality office spaces.
