India’s office leasing market achieved a record-breaking milestone in 2024, with absorption reaching an unprecedented 66.4 million square feet across the top six cities, a 14% year-on-year growth, according to a report by Colliers India. Bengaluru spearheaded this growth, recording its highest-ever annual leasing at 21.7 million square feet—a 40% surge compared to 2023.

Hyderabad and Mumbai also witnessed significant activity, with leasing volumes rising to 12.5 million and 10 million square feet, respectively, marking their strongest annual performance. “After successive quarters of higher space uptake, Grade A office space demand in India has broken all records,” said Arpit Mehrotra, Managing Director, Office Services, Colliers India. He added that the market is stabilising at elevated levels, with annual absorption exceeding 60 million square feet likely to become the new norm in the coming years.

Regional Variations and Sectoral Contributions

While Bengaluru and Hyderabad dominated leasing activity, other markets faced challenges. Chennai experienced a sharp 35% decline in annual leasing to 6.8 million square feet, while Delhi-NCR saw a 16% drop to 9.7 million square feet. Quarterly trends in Q4 showed continued strength in Bengaluru, which absorbed 6.6 million square feet, while Hyderabad and Mumbai demonstrated robust quarter-over-quarter growth of 41% and 71%, respectively.

Flex spaces emerged as a standout segment, accounting for 24% of Grade A leasing in Q4 and achieving a record annual absorption of 12.5 million square feet—a 45% year-on-year increase. “Flex space activity has grown significantly in 2024, accounting for almost 20% of India’s office space demand,” noted Vimal Nadar, Senior Director and Head of Research at Colliers India. Businesses seeking agility and cost efficiency in the evolving workplace landscape drove the demand for flexible workspaces.

Flex Spaces and Key Demand Drivers

Flex spaces have firmly transitioned from a niche offering to a mainstream requirement, fueled by strong uptake from tech firms, BFSI, and the engineering and manufacturing sectors. The technology sector continued to dominate, driving nearly one-fourth of total leasing activity, while BFSI and engineering also surpassed the 10 million square feet mark in annual leasing.

“Flex operators accounted for almost 20% of India’s office demand in 2024, up from a 5%-15% share in previous years starting in 2020,” added Nadar. Delhi-NCR and Bengaluru led flex space leasing, collectively contributing to over half of the year’s absorption in this segment.

Outlook for 2025

As Grade A demand stabilises, India’s office leasing market is poised for sustained growth in 2025. Flex spaces are expected to remain a key growth driver, alongside steady demand from technology, BFSI, and engineering sectors. Enhanced regional participation and innovative workspace solutions will likely define the next growth phase, making office spaces more adaptive and future-ready.

The strong leasing momentum, led by Bengaluru and supported by the rise of flex spaces, underscores the resilience and dynamism of India’s commercial real estate market. As companies continue to invest in quality workspaces, the market is well-positioned to maintain its growth trajectory in the coming years.