New Delhi, Feb 27 India’s office market reported the highest-ever supply in any year, as new office supply hit an all-time high in 2024 across seven major cities at 515 lakh square feet, a report showed on Thursday.
A surge in demand for grade-A office spaces kept developers active throughout the year.
Construction activities increased by 7 per cent compared to the previous year, reaching 515 lakh square feet, marking the highest supply ever recorded. Among the top seven cities, the maximum fresh supply was seen in Hyderabad followed by Bengaluru, according to the report by Vestian.
With robust absorption and supply in 2024, vacancy rates improved slightly, decreasing from 13.98 per cent in 2023 to 13.91 per cent in 2024.
Additionally, rental prices increased by 3.8 per cent to 8.2 per cent across the top seven cities.
In 2024, the absorption reached an all-time high of 707 lakh square feet, reflecting a 16 per cent annual increase, the report mentioned.
All cities except the National Capital Region (NCR) and Kolkata reported their highest-ever absorption levels during 2024.
"IT-ITeS sector continued to dominate leasing activities during 2024 with 36 per cent share. The share has increased from 24 per cent a year earlier. While IT industry is expected to lead in 2025 on the back of strong demand from GCCs, other segments such as BFSI and Flex Spaces are also anticipated to garner traction,” said Shrinivas Rao, FRICS, CEO, Vestian.
Bengaluru dominated the absorption with 177 lakh sq ft in 2024, registering an increase of 15 per cent over the previous year. However, the share remained stable at 25 per cent compared to last year.
The share of Mumbai in pan-India absorption increased from 14 per cent in 2023 to 18 per cent in 2024, whereas the share of NCR declined from 17 per cent to 13 per cent during the same period
Emphasis on sustainability has grown among occupiers as several multinational companies with offices in India have pledged to achieve net-zero emissions, leading to a rise in demand for green-certified office spaces in India.
Anticipating this shift, leading developers are prioritising the construction of sustainable office buildings, said Rao.
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