India’s commercial real estate sector experienced a historic boom in 2024, driven by global occupiers and domestic demand for office spaces. Reports from leading property consultants reveal that net office absorption reached 50 million sq ft, the highest in five years, while overall office leasing activity across India’s top nine cities hit a record-breaking 79 million sq ft, according to CBRE.

Rahul Arora, head of office leasing and retail services at JLL India, highlighted India’s growing prominence as a global office hub. “The Indian office market continues to shine, with historic net absorption levels. The expansion of global capability centres (GCCs) in core markets is pivotal, fueled by workplace dynamics in sectors like financial services, manufacturing, and tech outsourcing,” he said.

GCCs Drive Demand

Global Capability Centres (GCCs), offshore units of multinational corporations, played a significant role in India’s office leasing growth, accounting for 37% of the total absorption at 29.4 million sq ft, a 29% year-on-year increase. CBRE noted that India’s robust talent pool and business-friendly environment have attracted global firms to expand their GCC operations, particularly in technology, engineering, BFSI (banking, financial services, and insurance), and life sciences.

According to Knight Frank, GCCs and domestic firms dominated the leasing landscape, with 36% of the leased space anchored by businesses focused exclusively on India. Flexible space providers also saw a significant rise, leasing 15 million sq ft—a 52% year-on-year increase—as businesses increasingly embraced hybrid work models.

Key Markets: Bengaluru, Hyderabad, and Mumbai

Bengaluru emerged as the leader in office space absorption, accounting for over 28% of the total, followed by Hyderabad with 16% and Mumbai with 15%. Regarding gross leasing value, Bengaluru recorded 25.93 million sq ft, Mumbai reached 17.84 million sq ft, and the Delhi-NCR area accounted for 13.14 million sq ft, according to Cushman and Wakefield.

The demand for Grade A office spaces, characterised by superior amenities and prime locations, remained high throughout the year, though supply struggled to keep pace. Property consultants anticipate a recovery in supply for 2025, particularly in suburban markets of major cities.

Outlook for 2025

Industry leaders predict sustained growth for India’s office sector in 2025, fueled by demand from GCCs and key industries such as technology, engineering, BFSI, and niche sectors like semiconductors and life sciences. “India’s strategic appeal and innovative spirit will continue to position it as a global leader in the office market,” said Shishir Baijal, chairman and managing director of Knight Frank India.

Anshuman Magazine, chairman of CBRE India, noted, “The momentum from 2024 is expected to persist, with technology, BFSI, and GCCs driving demand for both traditional and flexible office spaces.”

As global companies capitalise on India’s resources and infrastructure, the country’s office market is set to maintain its upward trajectory, further solidifying its position as a global hub for businesses.