Office Space Leasing Surges to a Record High in 2024: Bengaluru, Hyderabad, Mumbai Lead the Way
Data from real estate advisory firm Savills India shows that in 2024, about 75.2 million square feet (msf) of office space was leased in India’s top markets, marking a 21% increase over the previous year.
Office SpaceReal EstateLeasingBengaluruMumbaiReal EstateDec 30, 2024
At a time when the demand for residential units is showing signs of distress, office leasing activity surged to a new record high.
Latest data from real estate advisory firm Savills India shows that during the year, about 75.2 million square feet (msf) of office space was leased in India’s top six markets.
This figure stood 21% higher than the record leasing activities that took place last year, which saw 62.3 msf of office space leased.
Among the office space markets, Bengaluru stands at the top with 22.9 msf, a 47% increase from the 15.6 msf that were leased last year.
Another hub for technology companies, Hyderabad, stands second with 13.1 msf, a 52% increase from the 8.6 msf gross leasing it reported last year.
The largest real estate market in the country, Mumbai, saw gross leasing surge by 21% year-on-year to 12.2 msf in 2024.
The market in the national capital region of Delhi (Delhi-NCR), which used to be the second largest market for office leasing, reported a dip.
With 11.3 msf office leasing in 2024, Delhi-NCR recorded a 10% drop in leasing activities and now stands at the fourth spot.
Pune grew 20% year-on-year to 8.5 msf, while Chennai, after a 14% year-on-year dip, is now at the sixth place with 8.3 msf leased during the year.
Naveen Nandwani, Managing Director, Commercial Advisory and Transactions, Savills India, commented, “The Indian office market has demonstrated impressive resilience and growth, reaching a historic high in gross absorption with 75.2 million sq.
ft in 2024.
Bengaluru, Hyderabad, and Mumbai have led the way, showing robust demand for quality office spaces.
This growth fosters a positive outlook for the sector as we approach the coming year, driven by the continued expansion of key industries and the resilience of the Indian economy.”
According to Savills, sectors like tech, BFSI (Banking, Financial Services, and Insurance), and flexible workspaces emerged as the top three contributors to leasing activity in 2024, accounting for 33%, 18%, and 17% of the total share, respectively.
Arvind Nandan, MD, Research & Consulting, Savills India, added, “For the second consecutive year, gross absorption has reached an all-time high, reflecting business robustness and confidence driven by strong economic growth.
With key factors such as urbanisation and infrastructure development working in India’s favour, demand is expected to grow even further in the coming years.”
Despite the surge in demand, new supply remained muted.
During 2024, new supply declined 14% year-on-year to 46.2 msf from 53.4 msf in 2024.
Close to 75% of this new supply came from Bengaluru, Hyderabad, and Pune.
However, leading markets like Bengaluru (-21% year-on-year), Chennai (-74%), Delhi-NCR (-47%), and Hyderabad (-18%) recorded steep falls in new projects.
Only Mumbai (116%) and Pune (59%) witnessed growth in new supply.
Savills India is a leading real estate advisory firm in India, providing comprehensive services including commercial advisory, transactions, research, and consulting.
With a deep understanding of the Indian real estate market, Savills India helps corporations and investors make informed decisions to drive their growth and success.
Frequently Asked Questions
What is the total office space leased in India's top markets in 2024?
In 2024, about 75.2 million square feet (msf) of office space was leased in India’s top six markets, marking a 21% increase over the previous year.
Which city leased the most office space in 2024?
Bengaluru leased the most office space in 2024 with 22.9 million square feet (msf), a 47% increase from the previous year.
What sectors were the top contributors to office space leasing in 2024?
The top sectors contributing to office space leasing in 2024 were tech (33%), BFSI (18%), and flexible workspaces (17%).
Why did new supply of office space decline in 2024?
New supply of office space declined by 14% year-on-year to 46.2 million square feet (msf) in 2024, primarily due to a decrease in new projects in leading markets like Bengaluru, Chennai, Delhi-NCR, and Hyderabad.
What is the outlook for the Indian office market in the coming years?
The outlook for the Indian office market is positive, driven by the continued expansion of key industries, robust economic growth, and factors such as urbanisation and infrastructure development.
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