New Delhi, March 25
India’s office leasing market broke previous records in 2024 at 81.7 million square feet (MSF), 19 per cent increase from 2023 and its highest-ever leasing in a calendar year, a report showed on Tuesday.
The IT/ITES sector constituted the largest share, accounting for 42 per cent of total leasing demand, up from 28 per cent in 2023, according to the report by real estate data analysis platform CRE Matrix and CREDAI.
“It was the overall business sentiment and a strong demand for flexible workspace models which powered India’s office leasing to record levels,” the report mentioned.
Bengaluru, Hyderabad, and Mumbai led the market, collectively accounting for 62 per cent of the demand and recording a 20 per cent year-on-year growth.
Except Bengaluru and Hyderabad, each of the top six cities witnessed their all-time high of office leasing demand last year.
According to the report, the office leasing market also saw most of the demand for large transactions, as transactions above 100,000 sq ft contributed 41 per cent of total demand, with a 13 per cent YoY increase, particularly in Bengaluru and Pune.
Pan-India office rental rates reached Rs 106 per square foot, reflecting an 13 per cent annual growth, primarily driven by a high demand-supply ratio, with Hyderabad, Pune, and Mumbai playing key roles in this surge.
India crossed the milestone of 900 msf of Grade A office stock in 2024. Bengaluru and Hyderabad, the largest supply contributors, added 55 per cent to this supply as compared to 51 per cent in 2023.