The office market in Mumbai and other major Indian cities has reached a new peak in 2024, with leasing activity hitting 66.4 million square feet, marking a 14% year-on-year growth, according to Colliers.
Bengaluru led the way with a record 21.7 million square feet leased, a 40% increase from the previous year. Hyderabad and Mumbai followed, with 12.5 and 10.0 million square feet respectively, both seeing double-digit growth. Delhi-NCR also showed strong demand, nearing the 10 million square feet mark.
The final quarter of 2024 was particularly strong, with 19.7 million square feet leased, a 14% increase from Q3. Hyderabad and Bengaluru drove this growth, accounting for 54% of Q4's leasing activity. Bengaluru saw the highest quarterly leasing at 6.6 million square feet, while Mumbai and Hyderabad experienced the highest quarter-on-quarter growth at 71% and 41% respectively.
Arpit Mehrotra, Managing Director of Office Services at Colliers India, noted, "Grade A office space demand in India has broken all past records in 2024. With three of the six major cities seeing over 10 million square feet of annual leasing, we anticipate annual uptake exceeding 60 million square feet to become the norm."
Flex spaces saw a record 4.7 million square feet leased in Q4, making up 24% of Grade A space uptake. For the year, flex space absorption reached 12.5 million square feet, up 45% YoY. The technology sector continued to lead overall demand, while engineering, manufacturing, and BFSI sectors also showed strong.
New office space completions totaled 53.3 million square feet in 2024, a 6% increase from 2023. Despite the new supply, vacancy levels dropped by 80 basis points due to high demand, while rental rates rose by 5%.
Vimal Nadar, Senior Director and Head of Research at Colliers India, predicts continued growth in flex spaces and anticipates their expansion into Tier-II and Tier-III cities in 2025. The preference for managed office spaces is expected to drive further investment and development in this sector.
