According to Vestian’s latest office market analysis, India’s commercial real estate market saw a surge in office space supply, increasing by 7% year-on-year to an all-time high of 515 lakh square feet. Hyderabad led the expansion, closely followed by Bengaluru, reinforcing the growing demand for office spaces across key cities.

Vacancy rates showed a marginal decline from 13.98% in 2023 to 13.91% in 2024, while rental values across seven significant cities recorded an increase of 3.8% to 8.2%. “The IT-ITeS sector continued to dominate leasing activities in 2024 with a 36% share, up from 24% the previous year. While IT will remain a key driver in 2025, BFSI and flexible workspaces are also set to gain momentum,” said Shrinivas Rao, FRICS, CEO of Vestian, as reported by ET.

Despite global economic uncertainties, India’s office space absorption hit a record 707 lakh square feet in 2024, marking a 16% annual rise. Most cities recorded their highest absorption levels except for NCR and Kolkata, which saw declines of 14% and 36%, respectively.

A shift towards sustainability is also reshaping the market, with multinational companies committing to net-zero emissions and driving demand for green-certified office spaces. “Developers are increasingly focusing on sustainable office buildings to meet evolving occupier preferences,” Rao added.

The strong demand for Grade A office spaces, coupled with the rise of GCCs and flexible workspaces, underscores the resilience and growth trajectory of India’s commercial real estate sector in 2025 and beyond.