Office space demand to reach 70 million sqft in 2024

The office space market in the country is expected to absorb over 70 million sq ft this year, according to a report from Savills India. The demand reached 55.1 million sq ft between January and September 2024, marking a 30% year-on-year (YoY) increase across six 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 seven million sq ft remaining to surpass 2023’s total, 2024 is expected to achieve absorption levels in the range of 70 to 74 million sq ft. The Q3 FY25 saw office absorption hit 20.2 mn sq ft, a 28% increase from Q3 FY24. Bengaluru, Delhi-NCR, and Mumbai collectively contributed 66% of the  overall leasing activity during this period. 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 million sq ft added, reflecting a 12% year-on-year decline. As a result, vacancy rates decreased to 15.5% by the end of September. Gurugram, with 64% share contributed highest in the leasing activity in  Q3 2024. Within Gurugram, Gurugram SBD topped the chart with 49% of the city leasing coming from this micromarket. Noida stood second with 27% share in the overall leasing followed by Delhi with 9% share. Mumbai recorded 3.2 million sq ft of absorption in Q3 2024, registering a 35% increase year-on-year. Mid-sized deals (25,000 sq ft to 99,999 sq ft) continued to dominate the leasing activity, with a 36% share. Pune added 2.0 million sq ft of gross absorptionin Q3 2024, registering a 42% year-on-year increase. This was driven by financial services occupiers pre-leasing large spaces, totaling 1.1 million sq ft.
 

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