India’s booming office market played a pivotal role in the 16% year-on-year growth in office demand across the Asia-Pacific (APAC) region, according to Colliers’ latest report. The region’s top 11 markets saw leasing activity reach 94.7 million square feet, with India, Mainland China, and Japan accounting for over 90% of total demand.

The second half of 2024 saw powerful leasing activity, with India leading the APAC market at 37 million sq ft, followed by Japan and Australia. “The APAC office market remained upbeat during H2 2024, with demand rising 6.1% YoY to 4.7 million sqm (50.6 million sq ft). Office space demand in the region continued to be driven by India, Mainland China, and Japan,” said Arpit Mehrotra, Managing Director, Office Services, Colliers India.

India’s Dominance in the APAC Office Market

India’s commercial leasing market remains robust, driven by technology firms and flex space operators, which accounted for 46% of total office take-up across the top six cities. With Grade A office demand surging, Bengaluru and Hyderabad led leasing activity, contributing to more than half of the country’s total Grade A space demand and supply.

“India remains one of the leading office markets in the APAC region, with over 70% share in leasing and 60% of new supply in H2 2024. Factors such as rental arbitrage, abundant talent, and language proficiency continue to drive Global Capability Centers (GCCs) and outsourcing hubs in India,” said Vimal Nadar, Senior Director & Head of Research Colliers India. In H2 2024 alone, GCCs leased 1.4 million sqm (~15 million sq ft) of office space, accounting for over 40% of overall leasing.

Steady Growth and Optimistic Outlook for 2025

Despite an overall 16.9% drop in new office supply across APAC, India defied the trend, recording 7% YoY growth in supply and contributing 60% of the region’s new office space in H2 2024. The nation’s vacancy rate remained stable at around 17%, indicating a healthy balance between demand and supply.

Colliers expects APAC office demand and supply to strengthen further in 2025, with companies increasingly opting for modern, flexible, and sustainable workspaces. “The outlook for the office occupier market remains positive, with strong demand set to drive further market shifts in the year ahead. The flight-to-quality will dominate, with occupiers seeking modern, flexible, and sustainable spaces that foster collaboration and productivity,” said Mike Davis, Managing Director of Occupier Services, Asia Pacific.

With corporate expansions, economic stability, and the continued return-to-office trend, India’s commercial real estate sector is set for sustained momentum in 2025, solidifying its role as the driving force in APAC’s office market.