2024 Office Leasing Hits All-Time High Across Indian Cities
India's office market hit a record 70.7 Mn sq ft leased in 2024, with rentals rising up to 13.9%, outpacing global trends.
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While office rental markets in major global cities face declining trends, India's office space sector has shown contrasting momentum with record leasing activity and steady rental growth, according to Vestian Research.
India recorded its highest-ever annual office space leasing in 2024 at 70.7 million square feet, reflecting a 16 per cent year-on-year growth. This marks a significant divergence from cities such as New York, Seattle, Hong Kong, and Shanghai, which have experienced steady rental declines over the past five years.
A key factor driving this growth is India's sub-dollar rental rates across major metro areas, including Delhi, Mumbai, Bengaluru, and Hyderabad. These rates continue to attract Global Capability Centers (GCCs), IT firms, and multinational corporations, positioning India as a preferred destination for office expansions.
Comparative data shows a different picture globally. New York's office rental rates declined by 5.1 per cent in 2024, while Seattle and Hong Kong registered a 5.5 per cent and 35.7 per cent fall, respectively. On the other hand, India saw rental increases in all top seven cities, with Hyderabad and Bengaluru recording the highest year-on-year growth of 13.9 per cent and 12.4 per cent, respectively.
India’s resilience is attributed to strong demand from the IT sector, a growing number of global firms setting up operations, and continued infrastructure development. The country's workforce availability at competitive rates further strengthens this trend.
According to Shrinivas Rao, CEO of Vestian, office markets globally are undergoing shifts due to the emergence of generative AI and evolving workspace models. However, India's demographic advantage, urban growth, and business-friendly environment are enabling consistent leasing momentum.
Major commercial districts such as Bandra Kurla Complex in Mumbai and Connaught Place in Delhi continue to command premium rates, averaging between USD 3 to 4 per square foot monthly. With increasing activity from both domestic and international firms, the need for quality office infrastructure remains high.
India's average rental growth in 2024 ranged between 3.8 per cent and 8.2 per cent across major cities. Pune, Chennai, and Kolkata also reported rental increases, contributing to the broader national trend.
Despite global office space facing high vacancy rates and declining demand, India is emerging as a bright spot. The combination of lower operational costs, favorable demographics, and ongoing urban development supports a positive outlook for the country's office leasing sector.
Vestian's data suggests that India's upward trend in leasing and rental values is expected to continue, positioning it as a leading global market for commercial office space in the near future.
