New Delhi [India], January 3 : India's office sector closed 2024 with significant achievements, recording a 89 million square feet (MSF) of gross leasing volume (GLV) across the top 8 cities, according to Cushman & Wakefield's latest office data.
This marks the highest-ever GLV recorded in the sector, surpassing 2023's peak by a significant 14 MSF and a 19 per cent increase.
Gross leasing volume, which factors in all leasing activity in the market, including fresh take-up, open market renewals by corporates as well as pre-leasing, is an indication of overall market activity.
This performance showcases three consecutive years of consistent growth in the office market activity, reinforcing India's position as the office of the world.
In terms of cities, Bengaluru led the charge, accounting for 29 per cent of India's GLV (25.93 MSF), followed by Mumbai at 20 per cent (17.84 MSF) and Delhi-NCR at 15 per cent (13.14 MSF).
Hyderabad and Pune rounded off the top five cities with shares of 14 per cent (12.31 MSF) and 10 per cent (8.47 MSF) respectively.
Notably, Bengaluru, Mumbai and Hyderabad, all recorded their highest-ever leasing volumes this year too.
Meanwhile, Net absorption, which is a barometer of real demand or expansion of occupied space in the market, was also at a record-breaking 50 MSF, surpassing the pre-Covid peak of 2019 by a significant 7 MSF.
Anshul Jain, Chief Executive, India, Southeast Asia and APAC Tenant Representation, Cushman & Wakefield said, "The growing presence of Global Capability Centers, contributing nearly 30 per cent of total demand, underscores India's strategic importance for global multinationals. As we move into 2025, the demand for Grade-A spaces is expected to remain robust, further solidifying India's dominance in the global office market."
Bengaluru, once again, topped the list with 14.18 MSF of net absorption, capturing 28 per cent of the total net absorption, a historic high for the city, followed by Mumbai at 10.93 MSF, Hyderabad at 8.18 MSF and Delhi-NCR at 7.06 MSF, as per the report.
Despite this strong demand, the report noted that the supply of Grade A office buildings struggled to keep pace. The year witnessed only 45 MSF of new Grade-A completions. This has led to a vacancy rate of 16 per cent in 2024, a drop of 1.8-2 per cent from last year.
Core markets across all major cities have tightened further with increased demand from multinationals. However, 2025 is expected to see a recovery in supply, with a considerable portion of it coming in the suburban markets across key cities, the report added.
The fourth quarter of 2024 was a key contributor to the strong demand as GLV and net absorption for the quarter stood at 24 MSF and ~16 MSF, respectively. The second half of the year accounted for nearly 55-58 per cent of the overall GLV and net absorption for the year.
In terms of sectoral performance, the IT-BPM sector was the largest contributor to demand with nearly 30 per cent share in fourth qaurter of 2024, followed by Engineering and manufacturing. and BFSI sectors with 23 per cent and 16 per cent shares, respectively. The flex sector also contributed to the demand by accounting for a 14 per cent share of GLV.
For the full year too, these sectors accounted for top-4 contributing segments with IT-BPM capturing a 29 per cent share, followed by BFSI and Engineering and manufacturing, each at 17 per cent, and flex at 14 per cent.
Global capability centres (GCCs) accounted for 27-29 per cent of the overall demand for office spaces for 2024 thereby reinforcing its significance for the Indian economy and commercial real estate sector. We have been highlighting the growing significance of GCC for the office sector in India over the last 2-3 years.
Veera Babu, Managing Director, Tenant Representation, Cushman & Wakefield added, "The Indian office market is on a strong footing as can be seen through three years of consistent surge in leasing activity. 2024 has been exceptional, even surpassing our bullish mid-year projections of demand crossing 80 MSF."