Domestic office market surges as India becomes hub for global occupiers

India’s commercial real estate skyrocketed last year primarily on the back of swelling demand from global firms scouring the country for office spaces, according to reports by top property consultants.

Net office absorption—or the new net floor space occupied by companies—reached about 50 million sq.ft. in 2024, the highest in five years, according to reports by real estate consultancies Cushman and Wakefield and JLL Research.

Across India’s top nine cities, overall office leasing recorded a historical high of 79 msf in 2024, according to a report by CBRE, a real estate services and investment firm.

“As we close out 2024, the Indian office market continues to shine as a pivotal hub for global occupiers, reaching historic net absorption levels of 49.56 million sq.ft.,” said Rahul Arora, head–office leasing and retail services, and senior managing director (Karnataka, Kerala), India, JLL.

“The expansion of global capability centres (GCCs) in core markets will be pivotal,” he added, “… with changing workplace dynamics fuelling occupier demand, particularly in financial services, manufacturing, and tech outsourcing. India’s office market is poised for continued upward momentum.”

Other experts, too, see demand for office space in India continuing to increase this year, in a sign of robust corporate sector employment and growth although recent quarterly results have been disappointing.

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“As we look towards 2025, the office sector in India is poised for continued growth, underpinned by sustained demand from a broad range of industries,” said Anshuman Magazine, chairman and chief executive–India, South-East India, Middle East and Africa, at CBRE.

“The momentum seen in 2024 is expected to persist, with technology, BFSI (banking, financial services, and insurance), and engineering sectors, along with global capability centres, driving the need for both traditional and flexible office spaces.”

Data from another property consultancy Knight Frank India, which tracks India’s top eight cities, showed that of the 72 msf of office space leased in 2024, 36% was anchored by businesses focused only on India, while GCC—the offshore units of global companies—accounted for another 31% of the transactions.

Leasing by flexible space providers,or co-working spaces, jumped 52% year-on-year in 2024, while third-party IT services companies leased 7.9 msf of office space, 21% more than in 2023, according to Knight Frank.

GCCs pick up pace

The CBRE report showed that domestic companies accounted for 45% of the total office space absorptionin 2024, followed by companies from the Americas at 34%, EMEA (Europe, Middle East and Africa) at 16%, and APAC (Asia-Pacific) at 5%.

GCCs leased 29.4 msf of office space in India in 2024, accounting for about 37% of the overall leasing activity across India’s top nine cities, a 29% year-on-year growth.

Global companies have been actively expanding their GCC operations in India by capitalising on the country’s talent pool and favourable business climate, the CBRE report said. This surge in GCC interest is likely to persist in 2025, with new entrants looking to set up centres in India, the report added.

Companies from sectors including technology, engineering, manufacturing, and BFSI are expected to drive demand for both traditional and flexible office spaces for their GCCs, with continued demand from niche sectors such as automobile, semiconductors, and life sciences, CBRE said.

Bengaluru dominated the office space absorption in 2024, accounting for over 28% share, followed by Hyderabad with 16% and Mumbai with a 15% share, according to the CBRE report.

In terms of gross leasing value, Bengaluru’s share was 29% at 25.93 msf, followed by Mumbai at 20% (17.84 msf) and Delhi-National Capital Region at 15% (13.14 msf), the Cushman and Wakefield report said.

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Flex leasing takes up space

Flexible space providers leased nearly 15 million sq.ft. in 2024, according to the JLL report, accounting for 19.8% share of the office space leased in India last year.

However, supply of grade A offices—new or renovated office buildings with superior amenities and usually in prime corporate locations—struggled to keep pace with demand in 2024, according to Cushman and Wakefield.

This year, though, the supply of grade A offices is expected to recover, with a considerable portion coming up in the suburban markets across key cities, the property consultancy said in its report.

“The sustained demand for premium office spaces, coupled with occupiers’ confidence, has propelled transaction volumes to historic highs,” said Shishir Baijal, chairman and managing director, Knight Frank India. “As we move forward, India’s strategic appeal and innovative spirit will continue to position it as a global leader in the office market.”

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