India Commercial Office Market to Grow 14% in 2024

India’s commercial office market is on the rise, recording a 14% year-on-year growth in 2024, with total office space absorption hitting 66.4 million sq ft. According to a recent report by FICCI and Colliers India, the momentum is expected to continue in 2025, with projected absorption between 65-70 million sq ft.

Vacancy Rates Drop, Rents Rise in India Commercial Office Market

The shift from a supply-driven to an occupier-led market is now evident, with vacancy rates expected to decline to 15-16% by 2025. This strong demand is also pushing up rental values, which are set to reach Rs 100-110 per sq ft per month.

Bengaluru and Hyderabad Leading the Market

Bengaluru recorded its highest-ever office absorption at 21.7 million sq ft in 2024, solidifying its position as the country’s top commercial real estate hub. Meanwhile, Hyderabad saw the fastest growth, with a 55% jump in leasing activity year-on-year.

The India Commercial Office Market is evolving, with the technology sector’s share shrinking from 40-50% in previous years to just 25% in 2024. In contrast, demand from engineering and manufacturing firms, banking and financial services, and flexible workspace operators now accounts for over 50% of Grade A office space leasing.

GCCs Driving Demand

Global Capability Centres (GCCs) are becoming a major force in India’s commercial office market. Leasing by GCCs surged 41% year-on-year, totaling 25.7 million sq ft in 2024. Bengaluru remains the top choice, capturing 47% of total GCC leasing, while Mumbai saw a fourfold increase compared to 2023.

According to Raj Menda, Chairman of FICCI Committee on Urban Development, office leasing is expected to grow another 8-10% in FY26, driven by demand from GCCs and financial services firms.

The Rise of Green Buildings

Sustainability is playing an increasingly important role, with over 70% of office leasing happening in green-certified buildings, a figure that could rise to 80-85% in 2025. Developers are responding, with nearly 80% of new office supply over the next 2-3 years expected to be green-certified.

Institutional Investments on the Rise

Real estate investments are also seeing strong momentum. In the first nine months of 2024, institutional investments reached USD 4.7 billion, with more than 60% of these funds flowing into industrial, warehousing, and residential assets.

Sriram Khattar, Vice Chairman & Managing Director- Rental Business, DLF, noted that companies prioritizing Grade A++ properties, scalability, and sustainability are gaining a competitive edge in the India Commercial Office Market.

Looking Ahead

Industry experts stress the need for better execution strategies and skilled workforce development, spanning both white-collar and blue-collar jobs, to sustain this growth. With strong leasing activity, rising investments, and a focus on green buildings, the India Commercial Office Market is on track for continued expansion in 2025 and beyond.

for more updates follow us on instagram