Bengaluru dominated the demand for Grade A office space in 2024, recording a leasing volume of 21.7 million square feet (msft), up by 40 per cent year-on-year (YoY), according to real estate services provider Colliers. The total office leasing across India reached 66.4 msft during the same period.

Bengaluru was followed by Hyderabad and Mumbai, with leasing volumes of 12.5 msft and 10.0 msft, respectively, while Delhi-NCR recorded 10 msft of leasing activity.

Bengaluru and Hyderabad top Q4 performance

The fourth quarter of 2024 recorded the highest leasing activity of the year, with 19.7 msft) leased, growing at 14 per cent compared to the previous quarter, according to the report.

Bengaluru and Hyderabad collectively accounted for 54 per cent of India’s leasing activity during Q4. Among the top six cities, Bengaluru led with the highest quarterly leasing at 6.6 msft, while Mumbai and Hyderabad posted quarter-on-quarter (QoQ) growth at 71 per cent and 41 per cent, respectively.

Explaining the outlook for next year, Arpit Mehrotra, Managing Director, Office Services, India, Colliers, “New supply during the year remained above the 50 million sq feet mark keeping the vacancy levels rangebound. Demand in 2025 is likely to stabilise at elevated levels, with annual space uptake expected to consistently exceed 60 msft in the coming years.”

Flex space booms

Flex spaces recorded their highest quarterly leasing in Q4 2024, with 4.7 msft leased, contributing to a record annual absorption of 12.5 msft, up 45 per cent YoY, Colliers said. Flex spaces accounted for 24 per cent of Grade A space uptake in Q4 and 20 per cent of total leasing in 2024.

The technology sector drove the highest annual demand, contributing nearly 25 per cent of total leasing activity. The BFSI (Banking, Financial Services, and Insurance) and engineering & manufacturing sectors also showed a strong performance, each surpassing 10 msft in leasing during the year.

Large-sized deals (≥100,000 sq ft) were a key driver of leasing activity, comprising 54 per cent of total demand in 2024. These deals were particularly favoured by occupiers in the technology sector and flex space providers, the report added.