Introduction
Bengaluru continues to dominate India’s commercial real estate sector, recording 18.1 million square feet (msft) of office leasing in 2024, according to Knight Frank India. This accounts for 25% of total transactions across the top eight cities, driven by a surge in leasing activity from Global Capability Centres (GCCs). With improved infrastructure and growing investments in office parks, Bengaluru remains a key market for businesses. How did other cities fare, and what factors contributed to this growth? Let’s explore.
Bengaluru’s Market Performance
In 2024, Bengaluru recorded 18.1 msft of office space absorption, cementing its lead in the country. A major contributor was the 145% YoY growth in GCCs, which increased their transacted volume from 3.8 msft in 2023 to 9.3 msft in 2024. GCCs accounted for over 50% of the city’s office transactions, highlighting the city’s appeal to multinational corporations.
How Major Cities Stacked Up
1. NCR:
NCR recorded 12.7 msft of office leasing, showing 25.3% YoY growth, driven by IT/ITES sectors and demand in Noida and Gurugram.
2. Mumbai:
Mumbai registered 10.4 msft, with a 25.3% YoY growth, led by financial services and co-working spaces.
3. Hyderabad:
Hyderabad saw 10.3 msft, achieving the highest YoY growth of 39.5%, thanks to its competitive rentals and strong tech ecosystem.
Why Bengaluru Stays Ahead
1. Enhanced Connectivity
Bengaluru’s metro extensions, such as the Purple Line and the ongoing Silk Board-Hebbal corridor, have improved accessibility, boosting demand in emerging micro-markets like PBD East and PBD North.
2. Office Park Investments
Large-scale investments in premium office parks have attracted occupiers seeking high-quality workspaces.
3. Rental Growth and Lower Vacancies
Weighted average rent rose to ₹91.8 per sq ft in 2024, while vacancy rates dropped to 11.9%, reflecting strong demand and limited new supply.
Flex Spaces on the Rise
Flex spaces witnessed a 14% YoY growth, with absorption increasing from 3.8 msft in 2023 to 4.3 msft in 2024. This trend underscores the rising preference for flexible work environments among startups and large enterprises.
Residential Market Leadership
Bengaluru also led residential sales in the ₹10–20 million segment, selling 19,744 units in 2024, representing 22% of total sales across the top eight cities.
Conclusion
Bengaluru’s leadership in India’s office-leasing market is a result of its robust infrastructure, dynamic workforce, and growing GCC presence. With other cities like NCR, Mumbai, and Hyderabad also showing strong growth, India’s commercial real estate sector is poised for a promising future.
