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New Office Space Supply Falls 6% to 451.5 Lakh Sq Ft Across Top 8 Cities in 2024: Report
India’s office space market saw a mixed performance in 2024, with a 6% annual decline in new office space supply but a record high in demand. Real estate consultant Cushman & Wakefield (C&W) provided insights into this dynamic year for office real estate across eight major markets.
Key Highlights
- New Office Space Supply: Declined to 451.5 lakh sq ft in 2024, down from 477.9 lakh sq ft in 2023.
- Gross Leasing Activity: Increased by 19% to 885.2 lakh sq ft in 2024, compared to 745.6 lakh sq ft in 2023.
- Net Office Leasing: Rose 21% to 500.7 lakh sq ft from 412.3 lakh sq ft in 2023.
- Sectoral Drivers: IT-BPM, engineering & manufacturing, and BFSI sectors were the major contributors to office space demand.
City-Wise Performance
| City | New Supply 2024 (Lakh Sq Ft) | Change from 2023 |
|---|---|---|
| Mumbai | 83.2 | +305% (20.5 in 2023) |
| Bengaluru | 133.4 | +0.2% (133.1 in 2023) |
| Delhi-NCR | 46.8 | −5% (49.2 in 2023) |
| Chennai | 21.7 | −59% (53.3 in 2023) |
| Pune | 42.2 | −27% (57.4 in 2023) |
| Hyderabad | 102.1 | −21% (128.6 in 2023) |
| Kolkata | 0 | −100% (13.2 in 2023) |
| Ahmedabad | 22.1 | −2% (22.7 in 2023) |
Demand Trends
- Gross Leasing Volume: Includes fresh take-up, open market renewals, and pre-leasing activity. It rose 19% in 2024, showcasing strong demand despite a supply dip.
- Net Absorption: A barometer of real demand, net absorption grew by 21% in 2024, reflecting corporate expansions and growing occupier interest.
Sectoral Insights
- IT-BPM: Continued to dominate office space demand.
- Engineering & Manufacturing: Contributed significantly to leasing activity.
- BFSI: Emerged as a key driver of demand in metro cities.
Market Outlook
Cushman & Wakefield predicts a recovery in office space supply in 2025, driven by suburban developments in major cities. Companies’ increasing focus on hybrid work models and expanding operations are expected to fuel demand further.
FAQs
Q1: Which city saw the highest increase in new office supply in 2024?
A1: Mumbai recorded a 305% increase in new supply, reaching 83.2 lakh sq ft.
Q2: What led to the decline in new office supply?
A2: Declines in cities like Chennai, Hyderabad, and Kolkata contributed to the overall reduction in supply.
Q3: Which sectors are driving office space demand?
A3: IT-BPM, engineering & manufacturing, and BFSI sectors are the primary drivers.
Q4: What is net absorption?
A4: Net absorption measures the actual expansion of occupied office space in the market.
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