Chennai: India's office space market is expected to reach a record high in 2024, with projected absorption surpassing 70 million sq. ft., according to Savills India.

Office space demand reached 55.1 million sq. ft. from January to September 2024—a 30% year-on-year increase across six major cities, setting a new benchmark for leasing activity in the first nine months of the year.

In Q3 2024 alone, office absorption totaled 20.2 million sq. ft., a 28% rise from the previous year, led by Bengaluru, Delhi-NCR, and Mumbai, which together accounted for 66% of leasing activity.

The IT-BPM sector dominated with a 29% share, followed by flexible workspaces (23%) and BFSI (22%). Despite rising demand, new office completions slowed in 2024, reaching 32.6 million sq. ft., down 12% YoY, reducing vacancy rates to 15.5%.

City-wise, Bengaluru saw a 48% YoY increase in Q3, with large deals driving 67% of the activity. Chennai focused on OMR Zone 1 and MPR micro-markets, while Delhi-NCR recorded substantial growth in Gurugram, especially in flexible workspace demand. Meanwhile, Mumbai's mid-sized deals dominated, and Pune's BFSI sector led leasing. Hyderabad's office demand rose significantly, led by the IT-BPM sector.

Savills forecasts that 2024's total office absorption could reach 70-74 million sq. ft., a 17% increase from 2023.

New supply is also expected to grow, with total completions projected at 60-62 million sq. ft., a 22% rise from last year.