Office leasing in 2024 rises 20.8%, records 72 msf in transactions: Report

One-fourth of total transactions concentrated in Bengaluru

India’s total office space absorption during 2024 stood at 71.9 million square feet (msf), surpassing the previous peak achieved in pre-pandemic 2019 by 19 per cent, according to Knight Frank. On a year-on-year (Y-o-Y) basis, transactions in 2024 recorded a growth of 20.8 per cent.

 

The global real estate consultancy attributed the growth to factors including India’s economic resilience, sustained gross domestic product (GDP) growth, robust domestic consumption, and the country's increasing prominence in the global economic landscape.

 

During the last calendar year, India-facing businesses anchored the market, accounting for 36 per cent of total transactions at 25.9 msf, while global capability centres (GCCs) represented 31 per cent with 22.5 msf. The share of flex space operators stood at 15.7 msf, up 52 per cent. Third-party information technology (IT) services also saw a 21 per cent Y-o-Y increase, with leasing activity of 7.9 msf.

   

City-wise, one-fourth of total transactions were concentrated in Bengaluru, which recorded transactions of 18.1 msf, a 45.1 per cent Y-o-Y increase.

 

Viral Desai, senior executive director, occupier strategy and solutions, industrial and logistics, capital markets, and retail agency, Knight Frank India, said, “Notably, transaction volumes reached historic highs in five of the eight leading markets, with occupiers across all categories expanding their presence. With a dynamic ecosystem and robust fundamentals, India remains the most vibrant and promising office market in the world.”

 

Further, new office completions also saw a rise of 17 per cent Y-o-Y, reaching 50.3 msf in 2024. The grade A office stock in India now stands at over 972 msf and is expected to reach 1 billion msf in the coming years.

 

Additionally, rents rose across all markets during the year amid sustained demand and relatively lower supply. Hyderabad led rental growth with a 7 per cent Y-o-Y increase, followed by Bengaluru and Chennai at 6 per cent Y-o-Y each in 2024.