BM Property: Bengaluru leads India’s record office leasing in 2024

Bengaluru’s office leasing market reached historic highs in 2024, accounting for a remarkable one-fourth of India’s total office transactions, as per the latest India Real Estate—Office and Residential (July–December 2024) report by Knight Frank India. The city recorded a staggering 18.1 million square feet (mn sq ft) of office space absorption, marking a 45.1% year-on-year (YoY) growth—the highest among all Indian markets.

Bengaluru takes lead

Bengaluru’s robust leasing activity was propelled by its position as a hub for Global Capability Centres (GCCs), which occupied 52% of the city’s total transactions, amounting to 9.3 mn sq ft. Flex space leasing also surged to 4.3 mn sq ft, a 52% YoY increase, reflecting the city’s growing appeal for co-working solutions. Third-party IT services contributed 1.9 mn sq ft, solidifying Bengaluru’s standing as the top choice for tech companies.

India’s office market breaks records
The report said that India’s office leasing activity soared to a historic 71.9 mn sq ft in 2024, a 20.8% YoY increase and 19% higher than the pre-pandemic peak in 2019.

This unprecedented growth is attributed to India’s economic resilience, strong GDP growth, and its emergence as a global business hub.

In 2024, India-facing businesses emerged as a key driver of the office market, contributing 36% of total transactions with a remarkable 25.9 mn sq ft of space absorbed.

Global Capability Centres (GCCs) occupied an impressive 22.5 mn sq ft, with Bengaluru leading the way, accounting for 41% of the GCC market. Flex spaces also experienced robust growth, with leasing activity surging by 52% year-on-year to 15.7 mn sq ft, driven largely by demand in Bengaluru and the National Capital Region (NCR), which together accounted for over 50% of this segment’s uptake.

Among individual markets, Bengaluru maintained its dominance with a record-breaking 18.1 mn sq ft of office space transactions. It was followed by NCR with 12.7 mn sq ft and Mumbai with 10.4 mn sq ft. Other notable performances came from Hyderabad, which recorded 10.3 mn sq ft, Pune with 8.0 mn sq ft, and Ahmedabad, which saw significant growth with 3.0 mn sq ft of transactions.

New completions and rental trends

According to the report, Bengaluru witnessed 12.4 mn sq ft of new office space completions in 2024, though this marked a 6.9% YoY decline. Despite this, demand outpaced supply, driving a 6% YoY rise in rentals, with average rents reaching Rs 92 per sq ft per month. Shishir Baijal, chairman and managing director of Knight Frank India, remarked, “Bengaluru’s record-breaking performance underscores its resilience and strategic importance in India’s office market. The city’s vibrant ecosystem, led by GCCs and flex spaces, positions it as a global leader in office leasing.”

Outlook

New supply and increasing rents will play a crucial role in shaping the city’s competitive edge, ensuring its position as a top choice for global and domestic businesses.