India’s office market reached an all-time high in 2024, with 515 lakh sq ft of new office space added across seven major cities. Despite economic challenges, demand for Grade-A spaces remained strong. Hyderabad and Bengaluru led new completions while rental prices steadily increased.
According to Vestian’s latest office market report, India’s office market has witnessed its highest-ever supply in 2024. Despite macroeconomic uncertainties, geopolitical tensions, and persistent inflation, developers remained active due to the rising demand for premium office spaces.
The report highlights a 7% increase in construction activity over the previous year, bringing the total new office supply to 515 lakh square feet. Hyderabad led the way in fresh supply, closely followed by Bengaluru, reflecting the growing preference for office hubs in southern India.
Vacancy rates slightly improved, decreasing from 13.98% in 2023 to 13.91% in 2024, driven by strong leasing activity. Rental prices also surged, recording an increase of 3.8% to 8.2% across major metropolitan areas.
“The surge in Grade-A office demand has kept developers engaged, ensuring steady expansion in the sector,” the report stated. Last year, India saw record-breaking office space absorption, with 707 lakh square feet leased—a 16% rise from the previous year. While most cities achieved peak absorption levels, NCR and Kolkata reported a 14% and 36% decline, respectively.
Bengaluru remained the dominant market, recording 177 lakh sq ft in office space absorption, a 15% increase over the previous year, while its national market share remained steady at 25%. Mumbai’s share of total absorption grew from 14% in 2023 to 18% in 2024, whereas NCR’s share dropped from 17% to 13%.
Southern cities (Bengaluru, Chennai, and Hyderabad) accounted for 57% of the total office space absorption, a marginal rise from 56% the previous year. Hyderabad also recorded the highest new completions at 145 lakh sq ft, followed by Bengaluru at 140 lakh sq ft. Notably, Kolkata had no new completions in 2024, starkly contrasting its over 10 lakh sq ft supply in the previous year.
Among the seven major cities, Mumbai experienced the highest increase in new office completions, surging by 170%. In contrast, Chennai saw a sharp decline, with new completions dropping by 57% in 2024.
With India’s office sector showing resilience, the rising demand for flexible and premium office spaces is expected to continue. Developers are poised to keep pace with market needs, ensuring the supply pipeline remains robust in the coming years.
