Synopsis
In 2024, net office absorption in India's top seven cities hit 50 million square feet, a six-year peak with a 29% yearly rise. Bengaluru and Hyderabad remain leaders, while NCR saw a remarkable 61% growth, driven by demand from global capability centers. The market is anticipated to grow positively in 2025.Key Takeaways
- Net office absorption reached 50 million sq ft in 2024.
- Bengaluru led with 14.9 million sq ft of absorption.
- NCR showed a 61% increase in office space demand.
- Office vacancies decreased to 16.5%.
- Market expected to grow positively in 2025.
New Delhi, March 7 (NationPress) The total net office absorption across the top seven Indian cities approached 50 million square feet in 2024, representing a six-year record and a remarkable 29 percent year-on-year increase from 38.64 million sq ft in 2023, as per a report released on Friday.
The seven cities include Bengaluru, Chennai, Hyderabad, Mumbai Metropolitan Region (MMR), Pune, Delhi-NCR, and Kolkata.
Southern markets, especially Bengaluru and Hyderabad, continue to lead in net office absorption, with Bengaluru at 14.9 million sq ft (34 percent YoY growth) and Hyderabad at 7.5 million sq. ft. (7 percent YoY growth), together accounting for 45 percent of the total absorption.
Chennai experienced a year-on-year growth of 31 percent, achieving 5 million sq. ft. in net office absorption for 2024, according to the report.
NCR showed remarkable growth with a 61 percent increase, totaling 9.5 million sq ft in 2024, largely fueled by strong demand from global capability centers (GCCs) and the technology sector.
“The market fundamentals improved significantly in 2024, with average office vacancies declining to 16.5 percent from 17.8 percent in 2023, despite the addition of over 48.1 million sq ft of new supply,” said Peush Jain, MD-Commercial Leasing and Advisory, Anarock Group.
The new office supply amounted to 48.1 million sq ft, representing a slight 1 percent increase from 2023.
Southern markets maintained their dominant position, contributing 58 percent of the total new office supply in 2024, although this is a slight decrease from their 62 percent share in 2023.
Despite a 4 percent year-on-year decline for both, Hyderabad and Bengaluru remained the top contributors with 12.9 million sq. ft. and 12.5 million sq. ft. respectively, as per the report.
The western region, particularly Mumbai Metropolitan Region (MMR), stood out with an impressive 89 percent growth, providing 9.3 million sq ft of new office supply in 2024.
The Indian office market has seen significant sectoral shifts in transaction patterns throughout 2024, reflecting broader economic and industry trends.
The report indicated that the Indian office market is set for positive growth in 2025, driven by several favorable factors influencing the commercial real estate landscape. India's status as a prime destination for GCCs remains a primary driver for office space absorption.
