India’s commercial real estate market witnessed significant growth in 2024, with the average deal size increasing by 10.24% year-on-year, according to a report by Knight Frank India. The average transaction size rose from 37,976 square feet in 2023 to 41,867 square feet across the top eight cities, signalling a robust demand for premium office spaces.

Hyderabad Leads in Deal Sizes

Hyderabad emerged as a leader, recording the highest average deal size at 70,535 square feet, a 10.13% increase from 2023. The city’s blend of modern infrastructure, affordable living, and thriving business districts has attracted national and international companies alike. “Hyderabad’s exceptional quality of life and world-class connectivity continue to drive demand,” the report noted.

Mumbai Sees Record Growth

Mumbai, the financial capital, recorded the highest percentage growth in average deal size at 54.59%. The city’s average deal size surged from 25,971 square feet in 2023 to 40,150 square feet in 2024, ranking third among the eight markets in absolute terms. Improved economic conditions, rising physical office occupancy, and key infrastructure developments, such as the operationalisation of new metro lines, including the BKC metro, supported this surge.

“The surge in average deal size reflects occupiers’ growing preference for higher-quality office spaces and longer lease commitments,” the report stated, highlighting the impact of improved accessibility and increased investment in workspace infrastructure.

Driving Factors Behind Growth

The overall market expansion is attributed to enhanced connectivity, infrastructure upgrades, and increased corporate confidence in physical workspaces. The report pointed out that businesses prioritise larger, better-equipped office spaces to accommodate their evolving needs, underscoring a shift towards long-term planning and investment.

Outlook for Commercial Real Estate

With the rise in average deal sizes across India’s key markets, the commercial real estate sector is poised for continued growth. Cities like Hyderabad and Mumbai are setting benchmarks with their robust infrastructure and tenant-friendly ecosystems, paving the way for future demand.

India’s commercial real estate sector remains resilient, adapting to market needs and maintaining its appeal as a global investment destination. The increasing deal sizes reflect the industry’s evolution and the growing importance of premium office spaces in a competitive business landscape.