The office space market in India is set to break records in 2024, with absorption projected to exceed 70 mn sq. ft., according to the latest report from Savills India, a global real estate advisory firm. The demand reached 55.1 mn sq. ft. between January and September 2024, marking a 30% year-on-year (YoY) increase across six major cities.
The Year-To-Date (YTD) leasing activity has set a new benchmark for the January-September period, aligning with 2022’s full-year performance. With only 7 mn sq. ft. remaining to surpass 2023’s total, 2024 is expected to achieve absorption levels in the range of 70-74 mn sq. ft.
Q3 2024 Surge
The third quarter of 2024 saw office absorption hit 20.2 mn sq. ft., a 28% increase from Q3 2023. Bengaluru, Delhi-NCR, and Mumbai collectively contributed 66% of the overall leasing activity during this period.
The IT-BPM sector led the market with a 29% share in Q3, followed by Flexible Workspaces (23%) and the BFSI sector (22%). Additionally, large deals accounted for 50% of total leasing activity, with Bengaluru, Delhi-NCR, and Pune driving more than 50% of their respective leasing through such transactions. While demand soared, new office completions slowed down during the first nine months of 2024, with a total of 32.6 mn sq. ft. added, reflecting a 12% YoY decline. As a result, vacancy rates decreased to 15.5% by the end of September.
2024 Projections
Savills India forecasts that leasing activity will reach 70-74 mn sq. ft. by the end of 2024, representing a 17% increase from last year. New completions are also expected to accelerate, with a projected total of 60-62 mn sq. ft., a 22% increase from 2023.
| Metrics (in mn sq.ft) | Q3 2024 | YTD 2024 | 2024F |
| Gross Absorption | 20.2 | 55.1 | 70-74 |
| Supply | 15.3 | 32.6 | 60-62 |
| Overall Grade A Stock | 782.7 | 782.7 | 806-810 |
Source: Savills India Research
| Cities | Gross AbsorptionYTD 2024 | SupplyYTD 2024 | Grade A StockYTD 2024 |
| Bengaluru | 15.9 | 9.8 | 231.5 |
| Chennai | 6.7 | 1.7 | 91.3 |
| Delhi-NCR | 7.6 | 2.0 | 144.6 |
| Hyderabad | 8.7 | 8.5 | 125.7 |
| Mumbai | 9.6 | 6.7 | 121.4 |
| Pune | 6.6 | 3.8 | 68.2 |
Source: Savills India Research
“India’s office market reached record-high absorption levels in Q3 of 2024, reflecting strong business sentiment amongst occupiers. With employees returning to physical offices, demand has surged across all segments, including tech. We anticipate this momentum to continue in the last quarter of the year, potentially driving absorption levels to new record of over 70 mn sq.ft in 2024. Demand is likely to be driven by tech, BFSI, flex workspace and engineering & manufacturing occupiers.” said Naveen Nandwani, MD, Commercial Advisory and Transactions, Savills India.” said Naveen Nandwani, MD, Commercial Advisory and Transactions, Savills India.
