India's Office Market Sees Record Growth with 515 Lakh Sq Ft in 2024

The year 2024 has been a landmark for India's commercial real estate sector. Despite global economic headwinds, geopolitical uncertainties, and persistent inflation, India's office market surged, setting new records in space supply and absorption.

According to Vestian's Office Market Report, the country saw a 7% year-on-year increase in office space construction, reaching 515 lakh square feet, the highest supply ever recorded. The demand for Grade-A office spaces has remained strong, encouraging developers to continue expansion.

Unprecedented Growth in Key Cities

Among the top seven metro cities, Hyderabad led the market in fresh office space supply, followed closely by Bengaluru. This surge in availability reflects the growing confidence in India's commercial real estate sector and its resilience amid global uncertainties.

With increased absorption and steady new supply, vacancy rates improved slightly in 2024, decreasing from 13.98% in 2023 to 13.91%. Rental prices across major markets also saw an upward trend, rising between 3.8% and 8.2%.

Record-breaking Absorption in 2024

Last year saw an all-time high office space absorption of 707 lakh square feet, marking a 16% annual increase. Notably, Bengaluru led the absorption rankings with 177 lakh sq ft, a 15% increase over 2023, maintaining its dominant 25% share.

While most cities recorded their highest-ever office space absorption, NCR and Kolkata saw declines, with NCR dropping by 14% and Kolkata witnessing a steep 36% decline.

The Southern markets (Bengaluru, Chennai, Hyderabad) emerged as the strongest, contributing 57% of India's total office absorption, up from 56% in 2023.

New Office Completions in Major Cities

• Hyderabad led in new office completions, adding 145 lakh sq ft in 2024.
• Bengaluru followed closely, contributing 140 lakh sq ft to the fresh supply.
• Mumbai recorded a 170% jump in new office completions, the highest among all metro cities.
• Kolkata, on the other hand, saw zero new completions, a sharp contrast to the 10 lakh sq ft of supply recorded in 2023.
• Chennai experienced a 57% decline in new office completions, making it the only major city to see a drop in supply.

This trend highlights a shifting focus toward high-growth metropolitan hubs, where infrastructure and economic development continue to fuel expansion.

India’s Office Market in 2024: A New Benchmark

With a record 515 lakh sq ft of new office supply and an all-time high absorption rate, 2024 has been a defining year for India's office real estate market. As infrastructure development and corporate expansions continue, the demand for premium office spaces is expected to remain strong in the coming years.

For businesses and investors, the Indian commercial real estate sector presents significant growth opportunities, solidifying its position as one of the world's most dynamic office markets.