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India office realty market surges to record high net absorption in 2024
India's office market has emerged as a crucial destination for global companies scaling their workforce and real estate presence, highlighted by a record high in net absorption in the year 2024. The sector continued to witness robust activity, driven by sustained occupier demand across major cities and a strong push from key industries.
The performance helped top seven property markets of the country to push annual net absorption to 49.56 million sq ft, up nearly 18%. Bengaluru led the charge with 2024 being its best year yet in net absorption terms while Mumbai also saw decadal high numbers, showed data from JLL India.
Strong annual performance across Delhi NCR and Hyderabad also contributed to the continued growth momentum in the office market. These four cities accounted for 77.8% share of the annual net absorption number in 2024.
"As we close out 2024, the Indian office market continues to shine as a pivotal hub for global occupiers The tech sector's partial recovery, claiming 25.8% of demand, alongside a robust BFSI and manufacturing/engineering presence, reflects the market's diverse strength. As we look ahead, the expansion of GCCs in core markets will be crucial, with quality assets and talent availability driving this growth,” Rahul Arora, Head - Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.
In 2024, India's office market reached unprecedented heights, exceeding 77.2 million sq ft in occupier leasing volumes and outstripping even the most optimistic forecasts.
“In 2024, the commercial real estate sector has seen remarkable growth, marked by record leasing volumes and a significant reduction in vacancy rates to their lowest levels since 2020. All key cities which have a focus on infrastructure, have seen growth. The interesting part is that large domestics are also now contributors to the demand of these markets. Looking ahead, we expect continued robust demand for Grade A Plus assets, across all of the major markets in India," said Vinod Rohira, MD & CEO, K Raheja Corp.
The fourth quarter, marked by record net absorption of 18.53 million sq ft, underscored the robust growth in this sector led Bengaluru posting its best quarter, accounting for a 36.1% share. Hyderabad jumped to the second spot with a 16% share.
“GCCs had a standout year, capturing 35.9% of the market with 28 million sq ft leased. As India's position as the 'office to the world' strengthens, its focus on AI and emerging technologies, alongside engineering R&D capabilities, is expected to further propel demand, making it a key destination for headcount growth and innovation over the next decade," said Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
Leasing by flexible office space providers surpassed 15 million sq ft in 2024, achieving a 19.8% share of annual leasing, its highest yet, highlighting the segment's growth and impact on India's office market.
Technology-based GCCs led overall GCC leasing volumes, driven by AI and related work tapping into India's talent pool. BFSI and manufacturing/engineering GCCs also showed strong contributions, reflecting demand across diverse R&D and innovation domains and an expansion of global operations.
Source: The Economic Times