Synopsis
In 2024, India's office market reached a historic milestone with a supply of 515 lakh square feet across seven major cities, driven by strong demand for grade-A office spaces. All cities, except NCR and Kolkata, reported record absorption levels, highlighting the growing emphasis on sustainability in office space.Key Takeaways
- Record office supply of 515 lakh sq ft in 2024.
- Demand for grade-A spaces remained high.
- Vacancy rates slightly improved.
- Rental prices increased across major cities.
- Sustainability focus is growing among developers.
New Delhi, Feb 27 (NationPress) India’s office market has achieved the highest recorded supply in any year, with new office supply reaching an unprecedented 515 lakh square feet in 2024 across seven major cities, according to a report released on Thursday.
A significant increase in demand for grade-A office spaces kept developers engaged throughout the year.
Construction activities saw a rise of 7 percent compared to the prior year, culminating in 515 lakh square feet, the highest supply ever documented. Among the leading seven cities, Hyderabad exhibited the most substantial fresh supply, followed closely by Bengaluru, as detailed by Vestian.
With strong absorption and supply in 2024, vacancy rates improved slightly, dropping from 13.98 percent in 2023 to 13.91 percent in 2024.
Moreover, rental prices increased by 3.8 percent to 8.2 percent across the top seven cities.
In 2024, absorption hit an all-time high of 707 lakh square feet, reflecting a remarkable 16 percent annual increase, the report highlighted.
All cities, with the exception of the National Capital Region (NCR) and Kolkata, reported their highest-ever absorption levels during 2024.
According to Shrinivas Rao, FRICS, CEO of Vestian, the IT-ITeS sector led leasing activities in 2024 with a 36 percent share, up from 24 percent a year prior. The IT industry is projected to remain at the forefront in 2025, driven by robust demand from GCCs, while other segments like BFSI and Flex Spaces are also expected to gain momentum.
Bengaluru topped absorption with 177 lakh sq ft in 2024, marking a 15 percent increase from the previous year, while its share remained consistent at 25 percent compared to last year.
The share of Mumbai in nationwide absorption rose from 14 percent in 2023 to 18 percent in 2024, whereas NCR's share declined from 17 percent to 13 percent during the same timeframe.
As sustainability gains traction, many multinational corporations in India have committed to achieving net-zero emissions, resulting in an increased demand for green-certified office spaces.
In light of this trend, leading developers are focusing on the construction of sustainable office buildings, Rao noted.
