India’s office space market saw remarkable growth in 2024, with gross leasing across six major cities rising 14% year-on-year to an all-time high of 66.4 million square feet, according to Colliers India. The surge in demand highlights the resilience and dynamism of the commercial real estate sector, driven largely by technology firms, engineering and manufacturing companies, and financial services providers.
Among the top performers, Bengaluru led the charge with a record 21.7 million square feet of office space leased, marking a staggering 39% increase from the previous year’s 15.6 million square feet. Hyderabad followed suit, with gross leasing rising 56% to 12.5 million square feet, up from 8 million square feet in 2023. Mumbai also saw a significant upswing, with demand growing 43% to 10 million square feet compared to 7 million square feet last year.
Mixed Trends Across Markets
While some cities experienced record-breaking activity, others faced setbacks. Chennai witnessed a sharp 35% decline in office space leasing, dropping to 6.8 million square feet from 10.5 million square feet. Similarly, Delhi-NCR saw a 16% decrease, with leasing activity falling to 9.7 million square feet from 11.6 million square feet. Pune reported modest growth, with leasing rising 4% to 5.7 million square feet.
The disparities highlight varying regional dynamics, with markets like Bengaluru and Hyderabad benefiting from robust demand for Grade A spaces. In contrast, others faced challenges such as slower economic activity or oversupply.
Sector-Wise Demand Driving Growth
The surge in leasing was fueled by demand from technology firms, which continue to anchor the market despite adopting hybrid work models. Engineering and manufacturing companies also played a significant role, leveraging office spaces to support expanding operations. Financial services providers further contributed to the growth, underscoring the sector’s recovery and renewed confidence in physical office spaces.
Colliers India reported that Grade A office spaces dominated the market, with 58.2 million square feet leased in 2024. This reflects tenant preferences for modern, well-equipped workspaces.
Outlook for 2025
Looking ahead, India’s commercial real estate market is expected to maintain its growth trajectory as occupiers continue to invest in quality office spaces. Tier-II cities may emerge as strong contenders, driven by cost advantages and infrastructure upgrades. Flexible office solutions and sustainable developments are also set to play a pivotal role in shaping future demand.
Record leasing activity in 2024 solidified India’s position as a dynamic and growing hub for commercial real estate, setting the stage for another robust year in 2025.
