- Indian office market hits record 34.7 million sq. ft. in H1 2024.
- Bengaluru leads with 8.4 million sq. ft. transactions.
- Flex spaces and co-working see significant growth to 21% of total deals.
The Indian office real estate sector has surged in the first half of 2024, recording a historic high of 34.7 million square feet in transactions across major cities. Bengaluru emerged as the frontrunner with 8.4 million sq. ft., underscoring its position as a robust commercial hub.
Despite regional variations in market dynamics, such as Chennai’s challenge with grade A space availability leading to reduced transaction volumes, overall vacancy rates dropped to 15.6%, signaling tightening market conditions and consequent rent increases.
India’s Office Real Estate Sector Soars to New Heights in H1 2024
The office real estate market in India has experienced unprecedented growth in the first half of 2024, marking a significant milestone with transactions totaling 34.7 million square feet. Bengaluru, Mumbai, and the National Capital Region led the charge, with Bengaluru alone accounting for 26% of total office volume transactions. Ahmedabad saw the highest year-on-year growth at 218%, albeit from a smaller base, highlighting emerging opportunities in non-metro cities. Chennai’s decline in transaction volumes due to limited grade A space availability contrasts with the broader trend of expansion seen in other major markets.
Flex spaces and co-working environments played a pivotal role, constituting 21% of total transactions, indicating a shift towards more flexible and collaborative work environments post-pandemic. This trend was bolstered by significant activity in the global capability centers (GCCs), which absorbed 48% more space, reflecting India’s growing stature as a preferred destination for corporate expansions and technology investments.
The market’s resilience was further underscored by a 39% year-on-year increase in office completions, totaling 25.1 million sq. ft., driven by improving business sentiments and expanding operations across various sectors. Rent escalations were observed across key markets like Chennai, Bengaluru, and Kolkata, with annual growth rates reaching up to 9%, signaling sustained investor confidence and economic stability.
The surge in India’s office real estate sector in H1 2024 not only reflects robust economic momentum but also underscores the resilience and adaptability of the market in responding to evolving business needs and workspace dynamics.
“With improving business sentiments and steadily decreasing uncertainties, occupiers are increasingly inclined to commit to long-term plans and expand operations.”
