Article
India Emerges as a Key Office Market Hub
January 31, 2025
India's office real estate market witnessed a remarkable year in 2024, marked by unprecedented growth and historic highs. The year saw a significant surge in office absorption, with the market scaling new heights. As per the latest figures, India's office absorption increased by nearly 16% year-over-year to touch a record 79.0 million sq. ft. in 2024, achieving a historic peak for India's office real estate market. This remarkable growth underscores the country's emergence as a preferred destination for businesses and investors alike.
The office supply addition in 2024 was equally impressive, with new completions witnessed during the year. Bengaluru, Hyderabad, and Pune led the supply addition, collectively accounting for a significant 67% share. In the fourth quarter, the three cities drove supply addition with a cumulative share of about 69%.
The absorption trends in 2024 were dominated by Bengaluru, which accounted for about 28% of the total space take-up, followed closely by Hyderabad, Mumbai, and Delhi-NCR, each contributing around 15%. The October-December quarter saw Mumbai emerge as the frontrunner in transaction activity, followed by Hyderabad and Bengaluru, which together accounted for approximately 66% of the overall space take-up. These trends underscore the evolving dynamics of India's office real estate market and highlight the growing prominence of key cities as business hubs.
2024 Office Market Performance
The Indian office market has consistently demonstrated its resilience and adaptability in the face of economic fluctuations. The supply pipeline added approximately 52.3 million sq. ft. of new completions, led by Bengaluru, Hyderabad, and Pune. In Q4 2024, these cities drove supply addition with a good amount of share strengthening the hold. The strong demand for office spaces was driven by various sectors, including technology, finance and healthcare. This growth momentum is a testament to India's emergence as a preferred destination for businesses and investors alike. The country's robust economic growth, skilled talent pool and favourable business climate have created a conducive environment for companies to establish and expand their operations. As a result, the office market has witnessed a surge in demand, leading to increased absorption and rental growth.
Key Drivers of Growth
GCCs played a significant role in 2024, accounting for 35-40% of the overall leasing activity in India and registering a 20%+ growth compared to 2023. This growth momentum is expected to persist, driven by India's skilled talent pool and favourable business climate. Sectors like technology, E&M and BFSI will likely drive demand for office spaces. The growth of GCCs in India can be attributed to the country's ability to provide high-quality talent at competitive costs. Additionally, the government's initiatives to promote ease of doing business and encourage foreign investment have created a favourable environment for GCCs to thrive. As a result, global companies are increasingly establishing and expanding their GCC operations in India, driving demand for office spaces. The growth of GCCs is also expected to drive demand for specialized office spaces, such as data centers and innovation hubs.
Emerging Trends
The Indian office market is shifting towards sustainable and future-proofed assets. Occupiers seek high-quality office spaces with modern facilities and amenities, driving demand for green-certified buildings. Over 60% of the office supply pipeline is expected to be green certified over the next two to three years. This trend is driven by the growing awareness of the importance of sustainability and the need to reduce carbon footprint. Occupiers are increasingly prioritizing office spaces that offer a healthy and productive work environment, while also minimizing their environmental impact. Developers are responding to this demand by incorporating sustainable design principles and green building technologies into their projects. The growth of green-certified buildings is expected to drive innovation in the office market, with developers exploring new technologies and design approaches to create sustainable and future-proofed assets.
2025 Outlook
India's office sector is poised for steady growth in 2025, driven by robust domestic expansion, continued investments and a diversified occupier base. Demand for office spaces is expected to remain stable in H1 2025, with some occupiers focusing on operational efficiency. The outlook for 2025 is positive, with India's office market expected to continue its upward trajectory. Overall, 2025 is expected to be a promising year for India's office sector, with steady growth and increasing demand for high-quality office spaces.
The office supply addition in 2024 was equally impressive, with new completions witnessed during the year. Bengaluru, Hyderabad, and Pune led the supply addition, collectively accounting for a significant 67% share. In the fourth quarter, the three cities drove supply addition with a cumulative share of about 69%.
The absorption trends in 2024 were dominated by Bengaluru, which accounted for about 28% of the total space take-up, followed closely by Hyderabad, Mumbai, and Delhi-NCR, each contributing around 15%. The October-December quarter saw Mumbai emerge as the frontrunner in transaction activity, followed by Hyderabad and Bengaluru, which together accounted for approximately 66% of the overall space take-up. These trends underscore the evolving dynamics of India's office real estate market and highlight the growing prominence of key cities as business hubs.
2024 Office Market Performance
The Indian office market has consistently demonstrated its resilience and adaptability in the face of economic fluctuations. The supply pipeline added approximately 52.3 million sq. ft. of new completions, led by Bengaluru, Hyderabad, and Pune. In Q4 2024, these cities drove supply addition with a good amount of share strengthening the hold. The strong demand for office spaces was driven by various sectors, including technology, finance and healthcare. This growth momentum is a testament to India's emergence as a preferred destination for businesses and investors alike. The country's robust economic growth, skilled talent pool and favourable business climate have created a conducive environment for companies to establish and expand their operations. As a result, the office market has witnessed a surge in demand, leading to increased absorption and rental growth.
Key Drivers of Growth
GCCs played a significant role in 2024, accounting for 35-40% of the overall leasing activity in India and registering a 20%+ growth compared to 2023. This growth momentum is expected to persist, driven by India's skilled talent pool and favourable business climate. Sectors like technology, E&M and BFSI will likely drive demand for office spaces. The growth of GCCs in India can be attributed to the country's ability to provide high-quality talent at competitive costs. Additionally, the government's initiatives to promote ease of doing business and encourage foreign investment have created a favourable environment for GCCs to thrive. As a result, global companies are increasingly establishing and expanding their GCC operations in India, driving demand for office spaces. The growth of GCCs is also expected to drive demand for specialized office spaces, such as data centers and innovation hubs.
Emerging Trends
The Indian office market is shifting towards sustainable and future-proofed assets. Occupiers seek high-quality office spaces with modern facilities and amenities, driving demand for green-certified buildings. Over 60% of the office supply pipeline is expected to be green certified over the next two to three years. This trend is driven by the growing awareness of the importance of sustainability and the need to reduce carbon footprint. Occupiers are increasingly prioritizing office spaces that offer a healthy and productive work environment, while also minimizing their environmental impact. Developers are responding to this demand by incorporating sustainable design principles and green building technologies into their projects. The growth of green-certified buildings is expected to drive innovation in the office market, with developers exploring new technologies and design approaches to create sustainable and future-proofed assets.
2025 Outlook
India's office sector is poised for steady growth in 2025, driven by robust domestic expansion, continued investments and a diversified occupier base. Demand for office spaces is expected to remain stable in H1 2025, with some occupiers focusing on operational efficiency. The outlook for 2025 is positive, with India's office market expected to continue its upward trajectory. Overall, 2025 is expected to be a promising year for India's office sector, with steady growth and increasing demand for high-quality office spaces.