India’s office real estate market witnessed an all-time high in new supply in 2024, reaching 515 lakh square feet across seven major cities, according to Vestian’s latest report. Despite global economic uncertainties, geopolitical tensions, and persistent inflation, the demand for premium office spaces remained strong, driving a 7% increase in new completions over the previous year.

Hyderabad led the surge in fresh supply, followed by Bengaluru. The strong absorption levels led to a marginal improvement in vacancy rates, which declined from 13.98% in 2023 to 13.91% in 2024. Rental prices also saw an uptick of 3.8% to 8.2% across major markets.

Total office space absorption reached a record 707 lakh square feet in 2024, reflecting a 16% annual increase. While most cities posted their highest-ever absorption levels, NCR and Kolkata recorded declines of 14% and 36%, respectively. Bengaluru remained the largest contributor, absorbing 177 lakh square feet, while Mumbai saw the most significant year-on-year growth in new completions at 170%. Kolkata, on the other hand, saw no new office supply in 2024.

Shrinivas Rao, CEO of Vestian, highlighted that the IT-ITeS sector dominated leasing activity, accounting for 36% of total transactions, up from 24% the previous year. He also noted the growing emphasis on sustainability, as multinational corporations push for net-zero emissions, leading to a rise in demand for green-certified office spaces. Developers are responding by prioritizing sustainable office buildings.

Southern cities—Bengaluru, Chennai, and Hyderabad—accounted for 57% of the total absorption in 2024, slightly up from 56% in 2023. Mumbai’s share of office absorption increased from 14% to 18%, while NCR’s declined from 17% to 13%. Hyderabad topped new supply additions with 145 lakh square feet, followed closely by Bengaluru at 140 lakh square feet.

With sustained demand from Global Capability Centers (GCCs) and growing interest from BFSI and flexible office space providers, 2025 is expected to maintain a strong growth trajectory in India's office market.