India’s office leasing market continued its impressive growth trajectory in 2024, achieving a third consecutive year of record activity. Leasing volumes across the top six cities reached 66.4 million square feet, a 14% increase from the previous year, driven by demand from multinational corporations (MNCs), flexible workspace operators, and robust economic growth.

Bengaluru led the way with a historic 21.7 million square feet leased, accounting for one-third of the total space uptake. “Bengaluru witnessed robust demand and accounted for close to 22 million square feet of leasing, making it the top market in 2024,” said Arpit Mehrotra, Managing Director, Office Services, Colliers India. Hyderabad and Mumbai followed with 12.5 million and 10 million square feet leased, respectively, achieving double-digit leasing volumes for the first time.

Growth Drivers and Sector Highlights

Flexible workspaces emerged as a significant driver, contributing 20% of the total office space demand. Flex operators saw a record annual absorption of 12.5 million square feet, marking a 45% year-on-year growth. “Flex operators accounted for nearly 20% of office demand in 2024, up from 5-15% in previous years. This reflects the occupier preference for managed office spaces,” said Vimal Nadar, Senior Director and Head of Research Colliers India.

The technology sector maintained its position as the largest occupier, accounting for nearly 25% of the total Grade A office space leased in 2024. Meanwhile, BFSI and engineering sectors also displayed vigorous activity, surpassing 10 million square feet of leasing. Large deals exceeding 100,000 square feet significantly contributed to 54% of the total demand, particularly among tech and flex space occupiers.

Consistent Demand and Supply Trends

Leasing activity gained momentum throughout the year, with each quarter surpassing the previous one. The fourth quarter saw the highest leasing volume at 19.7 million square feet, a 14% increase over Q3 2024. Hyderabad and Bengaluru collectively accounted for 54% of the leasing activity in Q4, with Bengaluru leading at 6.6 million square feet and Hyderabad recording a 41% sequential growth.

New supply also kept pace with demand, with 53.3 million square feet of Grade A office space delivered in 2024, a 6% increase over 2023. The vacancy rate remained stable due to the balance between vigorous leasing activity and steady supply.

The Road Ahead

Industry experts predict that annual leasing volumes exceeding 60 million square feet could become the new norm over the next few years. With flex space operators expanding into Tier-II and Tier-III cities and multinational corporations increasing their footprint, the market is set for sustained growth. “Demand in 2025 is expected to stabilise at elevated levels, continuing the momentum from 2024,” added Mehrotra.

India’s office leasing boom highlights the resilience of the commercial real estate sector, driven by evolving workplace needs, growing sectors, and a dynamic economic environment. As demand for Grade A spaces continues to rise, the market is poised for further growth in the coming years.