India’s top commercial real estate markets witnessed robust momentum in 2024, with leasing activity and office rental rates rising between 4% and 8%, according to a report by real estate services firm Vestian, published by The Economic Times.
The report highlights that the National Capital Region (Delhi) saw the sharpest rise in office rentals, with an increase of 8.2%, followed by Mumbai at 6.7% and Bengaluru at 4.7%. Other major Indian cities also posted leasing growth within this range, reflecting strong market momentum despite global headwinds.
In contrast, several international office markets saw a downturn in both leasing and rents. New York posted a 1.3% rental decline, while Seattle and Hong Kong registered negative growth of 1.9% and 6.0%, respectively. Shanghai, China’s key business hub, recorded a steep 6.8% drop in rental values.
While certain global markets such as London and Miami bucked the trend with sharp rental increases of 31% and 53%, Vestian’s report notes that the broader global office leasing sentiment remains sluggish, affected by rising vacancy rates and evolving workplace strategies.
“The global decline in office leasing and rents is driven by disruptive technologies like generative AI and new approaches to space utilization,” said Shrinivas Rao, CEO of Vestian.
India, however, remains resilient, with leasing volumes and rentals rising steadily in 2024. Demand has been primarily fueled by the expansion of the IT sector and Global Capability Centers (GCCs), which continue to drive space absorption across metropolitan areas.
Rao emphasized that global firms are increasingly seeking office space in India due to its strong economic fundamentals, large consumer base, rapid urbanization, and an abundant pool of skilled professionals at competitive costs. “India’s affordability, combined with its expansion-driven leasing, makes it a standout destination in the global office market,” he said.
Prime commercial districts like Mumbai’s Bandra Kurla Complex (BKC) and Delhi’s central business zones, including Connaught Place and surrounding areas, continue to command premium rentals, averaging between $3 and $4 per square foot per month.
According to Vestian, India’s office market outlook remains positive, backed by strong economic activity, mega infrastructure projects in the pipeline, and sustained GCC expansion. These factors are expected to support continued growth in both office leasing and rental rates across the country’s major urban centers.
While the global office leasing market faces uncertainty, India’s commercial real estate sector is bucking the trend with robust growth and expanding corporate demand, the report concluded.