India's New Office Supply Hits Record High of 515 Lakh Sq Ft in 2024

India's office space industry set a historic high in 2024, with new office supply in the top seven cities reaching 515 lakh square feet, as per Vestian's report. The increase, fueled by growing demand for grade-A office space, is a 7% increase in construction activity over the last year.

 

Hyderabad led the fresh supply with 145 lakh sq ft, followed closely by Bengaluru with 140 lakh sq ft. Mumbai saw the most dramatic increase in new completions, rising by 170%, while Chennai experienced a 57% decline. Kolkata, on the other hand, recorded no new completions in 2024, in stark contrast to over 10 lakh sq ft supplied the previous year.

 

Office space absorption reached a record 707 lakh sq ft, representing an annual growth of 16%. Bengaluru led the pack with 177 lakh sq ft absorbed, increasing by 15% compared to the previous year, while Mumbai's percentage of pan-India absorption increased from 14% in 2023 to 18% in 2024. However, NCR experienced a drop, with its share going down from 17% to 13%.

 

The IT-ITeS industry was the prime mover of leasing activity, with a 36% share compared to 24% in 2023. According to Shrinivas Rao, FRICS, CEO of Vestian, the IT industry will continue to lead in 2025 too, driven by high demand from Global Capability Centers (GCCs). BFSI and Flex Spaces are also likely to gain momentum.

 

Southern cities like Bengaluru, Chennai, and Hyderabad together contributed 57% of the pan-India absorption, marginally higher than 56% in 2023. Even with regional differences, the overall market sentiment is positive, indicating sustained growth and ongoing investor interest in India's commercial real estate market.

 

This strong growth showcases India's changing office market, with major cities switching rapidly to support the nation's fast-changing business environment. With demand high, 2025 will also be a year of growth, development, and opportunity for the commercial real estate market.