{"id":1480,"date":"2025-03-25T13:20:00","date_gmt":"2025-03-25T07:50:00","guid":{"rendered":"https:\/\/www.crematrix.com\/blog\/?p=1480"},"modified":"2026-01-30T13:22:19","modified_gmt":"2026-01-30T07:52:19","slug":"indias-office-leasing-touches-record-81-7-msf-in-2024-it-ites-leads-demand","status":"publish","type":"post","link":"https:\/\/www.crematrix.com\/blog\/indias-office-leasing-touches-record-81-7-msf-in-2024-it-ites-leads-demand\/","title":{"rendered":"India\u2019s Office Leasing Touches Record 81.7 MSF in 2024, IT\/ITES Leads Demand"},"content":{"rendered":"\n

India\u2019s office leasing market hit a historic high in calendar year (CY) 2024, with leasing volumes touching 81.7 million square feet (MSF), the highest ever recorded, according to the joint CRE Matrix\u2013CREDAI India Office Report Q4 CY\u201924<\/a>. The market registered a 19 percent year-on-year increase. This growth indicates the resilience of occupier demand even as companies adapt to new workplace models amid global economic headwinds.<\/p>\n\n\n\n

IT\/ITES Drives Market Momentum<\/strong><\/h4>\n\n\n\n

The IT\/ITES sector emerged as the largest demand driver. These accounted for 42 percent of total leasing activity in 2024, a sharp rise from 28 percent in CY\u201923. This resurgence reflects technology firms\u2019 renewed focus on expansion, consolidation into Grade A assets, and long-term portfolio planning.<\/p>\n\n\n\n

According to the report, India\u2019s top office markets\u2014Bengaluru, Hyderabad, and Mumbai continued to dominate leasing activity. Together, these metros contributed 62 percent of total demand, registering a robust 20 percent YoY growth.<\/p>\n\n\n\n

Rise of Large-Format Transactions<\/strong><\/h4>\n\n\n\n

Large office deals played a defining role in 2024. Transactions exceeding 100,000 sq ft accounted for 41 percent of total leasing, growing 13 percent YoY. This trend was particularly pronounced in Bengaluru and Pune. Clearly, occupiers now prefer scalable, campus-style developments that offer operational efficiency and flexibility for future expansion.<\/p>\n\n\n\n

Tightening Vacancies and Supply Constraints<\/strong><\/h4>\n\n\n\n

An average demand-to-supply ratio of 1.5 in CY\u201924 led to declining vacancy levels across key micro-markets, including Delhi NCR, Mumbai Metropolitan Region (MMR), and Chennai. As a result, the Pan-India vacancy rate fell to 15.7 percent, down from 17.7 percent in CY\u201923.<\/p>\n\n\n\n

The imbalance was especially visible in Q4 CY\u201924. At this point, office leasing demand stood at 17.9 MSF, while new supply lagged at 12.1 MSF. This, in turn, resulted in high rentals.<\/p>\n\n\n\n

Flexible Workspaces Gain Further Ground<\/strong><\/h4>\n\n\n\n

The co-working and flexible office segment continued its upward trajectory. Notably, they contributed 13 MSF to total leasing demand in 2024\u2014well above the three-year average of 10 MSF. This represents a 30 percent increase, driven by rising enterprise adoption of managed and hybrid workspace models.<\/p>\n\n\n\n

Demand from co-working operators grew 25 percent YoY, with Delhi NCR doubling its absorption and Bengaluru recording a 1.4x increase compared to CY\u201923.<\/p>\n\n\n\n

Rentals Rise Amid Strong Fundamentals<\/strong><\/h4>\n\n\n\n

Reflecting tightening market conditions, Pan-India office rental rates increased to \u20b9106 per sq ft, registering a 13 percent YoY growth. Hyderabad, Pune, and Mumbai were key contributors to this rental appreciation, supported by strong occupier demand and limited Grade A supply additions.<\/p>\n\n\n\n

Grade A Office Stock Crosses 900 MSF<\/strong><\/h4>\n\n\n\n

Despite a 19 percent decline in new completions\u2014with total supply at 53.3 MSF in 2024\u2014India crossed a major milestone of 900 MSF of Grade A office stock. Bengaluru and Hyderabad together accounted for 55 percent of the new supply. Looking ahead, India is expected to add 295.7 MSF of fresh Grade A office space by 2027, with IT\/ITES expected to remain the dominant demand driver, followed by co-working (16 percent) and BFSI (12 percent) sectors. <\/p>\n\n\n\n

Elevate your decisions in real estate as a developer or broker with CRE Matrix\u2018s data-driven insights. Book a demo now<\/a>!<\/p>\n\n\n\n

Media Mentions<\/em><\/h4>\n\n\n\n