Ahmedabad recorded a 99% year-on-year growth in small office space sales, with 0.73 million sq ft transacted in H1 2024. Small offices comprised 44% of total transactions, driven by the city’s thriving business environment. Large and mid-sized spaces also saw significant growth, with development plans boosting future demand.
According to a report by Knight Frank India, Ahmedabad has witnessed a remarkable 99% year-on-year (YoY) growth in the sale of small office spaces. In the first half of 2024, the city recorded 0.73 million square feet of transactions in office spaces measuring below 50,000 square feet, marking a significant shift in the commercial real estate landscape. Small offices now account for 44% of the total office space transactions in the city.
Business Environment Drives Demand
Ahmedabad’s flourishing business environment has been a significant driver of this surge, with business activities contributing to 77% of the total volume of office space transactions. The demand for flexible and compact office spaces reflects the city’s growing appeal to startups, small enterprises, and companies looking for affordable real estate options.
“India’s thriving business environment has played a pivotal role in boosting demand for small office spaces,” the report noted. The increased focus on smaller spaces indicates a shift in how businesses plan their operations, emphasising flexibility and scalability.
Growth in Large and Mid-Sized Office Spaces
While small office spaces have seen the most significant growth, large ones measuring over 100,000 square feet—also gained traction. This category accounted for 39% of the total office leasing, with 0.65 million square feet transacted in the first half of 2024. Interestingly, there were no large office transactions in the same period last year, signaling a renewed interest in substantial office spaces for major corporations and enterprises.
Mid-sized office spaces, ranging from 50,000 to 100,000 square feet, comprised 17% of the total transactions, with 0.28 million square feet leased. This segment experienced a healthy YoY growth of 64%, further highlighting the dynamic shift in the city’s office space market.
Future Prospects: “Golden Cross” and AUDA Development Plans
Areas near Vaishnodevi Circle, commonly called the “Golden Cross,” are poised to benefit significantly from Ahmedabad’s urban development plans. The Golden Cross, strategically located at the intersection of S P Ring Road and S G Highway, has become a hotspot for office space development due to its connectivity and growing infrastructure. The Ahmedabad Urban Development Authority (AUDA) is drafting a new 20-year development plan to further boost real estate in this region.
The ongoing urban development initiatives and the city’s booming business environment are expected to accelerate demand for small and large office spaces in the coming years.
Conclusion
Ahmedabad’s office space market is transforming, with small office spaces leading the charge in 2024. The city’s business-friendly environment and strategic urban development plans drive demand across all categories of office spaces, from small startups to large enterprises. As the city grows, its commercial real estate market outlook remains strong.
