by THO
A surge in demand for grade-A office spaces has led to the completion of 515 lakh sq ft of new office space supply across the top seven cities in 2024, according to a report by Vestian.
“Construction activities increased by 7% compared to the previous year. Among the top seven cities, the maximum fresh supply was seen in Hyderabad (145 lakh sq ft) followed by Bengaluru (140 lakh sq ft),” the report added.
In 2024, the absorption reached an all-time high of 707 lakh square feet, reflecting a 16% annual increase. Absorption in Kolkata and NCR saw annual declines of 36% and 14%, respectively, it noted.
Also Read: Bengaluru tops office leasing 2024, sees record leasing of nearly 21.8 million sq ft: Report
Interestingly, Kolkata witnessed no new completions during 2024 as compared to over 10 lakh sq ft of supply in the previous year, the report said.
New completions increased by 170% in Mumbai, the highest amongst the top seven cities. Conversely, new completions were reduced by 57% in Chennai during 2024.
“IT-ITeS sector continued to dominate leasing activities during 2024 with a 36% share. The share has increased from 24% a year earlier. While IT industry is expected to lead in 2025 on the back of strong demand from GCCs, other segments such as BFSI and Flex Spaces are also anticipated to garner traction,” Shrinivas Rao, FRICS, CEO, Vestian said.
Also Read: Office space transactions cross 71 million sq ft mark in 2024, Bengaluru and NCR tops demand
Bengaluru dominated office space absorption
The report said Bengaluru dominated the absorption with 177 lakh sq ft in 2024, registering an increase of 15% over the previous year. However, the share remained stable at 25% compared to last year.
The share of Mumbai in pan-India absorption increased from 14% in 2023 to 18% in 2024 whereas the share of NCR declined from 17% to 13% during the same period. The share remained largely stable for the rest of the cities.
Southern cities (Bengaluru, Chennai, and Hyderabad) accounted for 57% of the pan-India absorption in 2024. The share marginally increased from 56% in 2023, according to the report.
