New Delhi [India], November 8 : India continued to lead office leasing activity in the Asia-Pacific (APAC) region, reaching 1.61 million square meters (17.3 million square feet) and demonstrating strong demand momentum, according to the Colliers Asia Pacific Office Market Insights Q3 2024 report.

The report highlights that over 70 per cent of the office demand in the third quarter of 2024 originated from India, with China following distantly at 17 per cent. Bengaluru and Hyderabad accounted for more than half of the Grade A office space uptake in India.

In line with this demand, India saw over 1.34 million square meters (14.4 million square feet) of new office completions in Q3 2024, keeping vacancy levels stable at approximately 17 per cent.
"Driven by robust demand and strong occupier interest in premium spaces, average rentals in major office markets across India are in the growth phase, having risen by up to 10 per cent annually in Q3 2024," said Arpit Mehrotra, Managing Director of Office Services at Colliers India.

The report anticipates continued growth for the Asia-Pacific office market in 2025, with demand in top markets rising by 10.7 percent year-on-year (YoY) in the third quarter of 2024.

"After seeing significant recovery gains, the Indian office market is set to enter an expansionary phase, wherein rents are expected to firm up further. Although the rental growth will vary across Indian cities, the overall rental property cycle aligns with select markets such as Australia, Japan, and New Zealand. Additionally, competitive rentals and robust demand from diverse occupier segments will continue to strengthen the positioning of India office market in the APAC region," he added.

In Q3 2024, demand for Grade A office spaces in APAC surged 10.7 per cent YoY to reach 2.2 million square meters (23.7 million square feet), indicating a potentially strong outlook for 2025. This growth was particularly notable in countries such as India, New Zealand, and Singapore, where annual office leasing increases surpassed 30 per cent.

"With a positive economic growth outlook in most APAC countries, office markets across the region are expected to remain resilient, with increased emphasis on 'flight to quality' and ESG-aligned workspaces. This trend is particularly evident in India, where space uptake in premium office spaces is supported by occupiers' appetite for best-in-class facilities and green certifications," said Vimal Nadar, Senior Director and Head of Research at Colliers India.

He added that developers are actively upgrading projects and incorporating sustainable elements into newer developments.

"Moreover, with continued traction in leasing activity, India can potentially witness 5-6 million square meters (54-64 million square feet) of Grade A space uptake in 2024, reinforcing its position as a key player in APAC's commercial real estate landscape," he added.