Bengaluru emerged as the leading city for Grade A office space demand in 2024, achieving a leasing volume of 21.7 million square feet (msft). This figure represents a substantial increase of 40% compared to the previous year, as reported by real estate services firm Colliers. In total, office leasing activity across India reached 66.4 msft during the same timeframe.
Following Bengaluru, Hyderabad and Mumbai reported leasing volumes of 12.5 msft and 10.0 msft, respectively, while the Delhi-NCR region reached 10 msft in leasing activity.
Bengaluru and Hyderabad Shine in Q4 Performance
The last quarter of 2024 marked a peak in leasing activity, with 19.7 msft leased—a 14% increase from the prior quarter. Bengaluru and Hyderabad together accounted for 54% of India’s leasing activity in Q4. Among the leading six cities, Bengaluru led the way with a quarterly leasing total of 6.6 msft, whereas Mumbai and Hyderabad experienced significant quarter-on-quarter growth rates of 71% and 41%, respectively.
Discussing the outlook for the upcoming year, Arpit Mehrotra, Managing Director of Office Services in India at Colliers, stated, “New supply exceeded 50 million square feet, keeping vacancy rates stable. We anticipate that demand in 2025 will remain strong, with annual space uptake expected to consistently surpass 60 msft in the coming years.”
Surge in Flex Space Demand
Flex spaces recorded their highest quarterly leasing performance in Q4 2024, reaching 4.7 msft and contributing to an unprecedented annual absorption of 12.5 msft—an increase of 45% year-on-year, according to Colliers. Flex spaces represented 24% of Grade A office space uptake in Q4 and accounted for 20% of overall leasing activity in 2024.
The technology sector emerged as the primary driver of demand, contributing nearly 25% of total leasing activity. The BFSI (Banking, Financial Services, and Insurance) and engineering and manufacturing sectors also exhibited robust performance, each exceeding 10 msft in leasing throughout the year.
Large transactions, defined as those over 100,000 square feet, played a significant role in driving leasing activity, making up 54% of total demand in 2024. These sizable deals were primarily favored by tenants in the technology sector and providers of flex space, as highlighted in the report.
