India’s commercial office market is witnessing a significant shift toward transparency and data-backed decision-making with the launch of the IIMB–CRE Matrix Commercial Property Rental Index (CPRI) – November 2024 Report. Developed by the Indian Institute of Management Bangalore in collaboration with CRE Matrix, this index is the first of its kind to track office rental movements using a large dataset of real lease transactions. Covering major cities such as Mumbai, Bengaluru, Hyderabad, and Pune, it accounts for nearly 90% of India’s Grade A/A+ office stock, making it a reliable benchmark for stakeholders.
Consistent Rental Growth Signals Strong Demand
The report highlights a steady upward trajectory in office rentals across India, driven by resilient occupier demand and improving fundamentals. Over the past five years, rentals across top cities have grown at a 3.6% CAGR, reflecting sustained momentum even amid global uncertainties.
Key growth highlights include:
- Rental increase observed in 74% of quarters over the last 12 years
- Post-2022 recovery remains strong, with 92% of quarters showing growth
- Q4 2022 recorded the highest quarterly increase of 3%
This consistent performance indicates that India’s office market is not just recovering—but evolving into a more stable and mature asset class.
Pune Leads, Bengaluru Shows Consistency
City-level performance reveals interesting trends across India’s top office markets. Pune has emerged as the top-performing city, recording the highest 12-year CAGR of 6.9% and achieving the highest index value in Q3 2024. The city’s strong IT presence and infrastructure growth continue to drive leasing demand.
Meanwhile, Bengaluru stands out as the most consistent performer, with rental growth recorded in 44 out of 50 quarters. Cities like Hyderabad and Chennai also demonstrate strong long-term growth, supported by expanding business hubs and technology corridors. Mumbai, while relatively stable, continues to benefit from high-demand micro-markets such as BKC and the Western Suburbs.
Micro-Markets Drive the Next Phase of Growth
A deeper look into macro-markets reveals that rental growth is increasingly being driven by specific high-performing business districts rather than entire cities. Locations such as CBD Pune, Gachibowli in Hyderabad, and Whitefield in Bengaluru have emerged as key growth engines.
Notable micro-market trends:
- CBD Pune recorded the highest index value (249)
- Gachibowli (Hyderabad) leads with a 5-year CAGR of 6.2%
- Emerging suburban hubs are gaining traction over traditional CBDs
This shift highlights how occupiers are prioritizing infrastructure, connectivity, and cost efficiency while making leasing decisions.
Post-Pandemic Momentum Remains Strong
The Indian office market has demonstrated remarkable resilience in the post-pandemic era. Leasing activity has rebounded strongly, with multiple quarters showing synchronized growth across all major cities. Businesses continue to invest in high-quality office spaces, reinforcing the importance of physical workplaces even in a hybrid work environment.
- 4 out of 8 recent quarters saw growth across all 10 cities
- Demand for Grade A/A+ offices remains robust
- Offices are increasingly seen as strategic assets, not just operational spaces
This trend suggests that the role of offices is evolving—from being a cost center to becoming a driver of collaboration, culture, and brand identity.
Why the CPRI is a Game-Changer
The introduction of the IIMB–CRE Matrix CPRI addresses a long-standing gap in India’s real estate sector, the absence of a transparent and standardized benchmark. By leveraging high-quality data and advanced modelling, the index enables more informed decision-making for investors, developers, policymakers, and occupiers.
As India progresses toward becoming a $25 trillion economy, the commercial real estate sector is expected to play a critical role, contributing up to 8–9% of GDP. Reliable indices like the CPRI will be instrumental in guiding this growth journey.
Conclusion
The IIMB–CRE Matrix CPRI marks a significant milestone in India’s commercial real estate landscape. With steady rental growth, strong city-level performance, and increasing reliance on data-driven insights, the office market is poised for long-term expansion.
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