India's Office Sector Achieves Record Leasing in 2024: Bengaluru Leads the Way
India's Office Sector Achieves Record Leasing in 2024
In 2024, India's office sector reached new heights with a record 89 million square feet (MSF) of gross leasing volume (GLV) across the top eight cities, as reported by Cushman & Wakefield. This marked a 19% increase from the previous year, showcasing three years of consistent growth.
City-wise Performance
Bengaluru led with 29% of India's GLV, followed by Mumbai and Delhi-NCR. Hyderabad and Pune also featured prominently. Bengaluru, Mumbai, and Hyderabad recorded their highest-ever leasing volumes.
Net Absorption and Demand
Net absorption hit a record 50 MSF, with Bengaluru again leading. The demand for Grade-A spaces remains strong, driven by Global Capability Centers and sectors like IT-BPM, engineering, and BFSI.
Supply Challenges
Despite high demand, only 45 MSF of new Grade-A completions were recorded, leading to a 16% vacancy rate. However, 2025 is expected to see a recovery in supply, especially in suburban markets.
Sector Contributions
The IT-BPM sector was the largest contributor to demand, followed by engineering, BFSI, and the flex sector. Global Capability Centers accounted for a significant portion of the demand.
Experts like Anshul Jain and Veera Babu from Cushman & Wakefield highlighted India's strategic importance and the strong footing of the office market.
Doubts Revealed
Leasing Volume
Leasing volume refers to the total amount of office space that has been rented out or leased to companies. It is measured in square feet.
Bengaluru
Bengaluru is a city in India, known as the 'Silicon Valley of India' because many technology companies have their offices there.
Net Absorption
Net absorption is the amount of office space that is newly occupied minus the space that has been vacated. It shows how much space is actually being used.
Global Capability Centers
Global Capability Centers are offices set up by international companies in different countries to handle various business functions like IT, finance, and customer service.
IT-BPM
IT-BPM stands for Information Technology and Business Process Management. It includes services like software development and managing business operations.
Grade-A Completions
Grade-A completions refer to the construction of high-quality office buildings that are ready for companies to move into.
Vacancy Rate
Vacancy rate is the percentage of office space that is available for rent but not currently occupied. A 16% vacancy rate means 16% of the office space is empty.
Suburban Markets
Suburban markets are areas located on the outskirts of a city. They often have more space for new buildings and can be less crowded than city centers.
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