New office space supply falls 6% across top 8 cities in 2024: Report

India's eight major office markets saw a 6 per cent annual decline in fresh supply of workspaces during 2024, even as the demand hit an all-time high, according to Cushman & Wakefield.

Real estate consultant Cushman & Wakefield (C&W) data showed that new supply of office space stood at 451.5 lakh square feet in 2024 as against 477.9 lakh sq ft in the preceding year.

New supply declined in Delhi-NCR, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad, while it jumped in Mumbai and rose marginally in Bengaluru.

Among cities, the new office space supply in Mumbai jumped more than 4 times to 83.2 lakh sq ft in 2024 from 20.5 lakh sq ft in the preceding year.

In Bengaluru, the new supply grew to 133.4 lakh sq ft from 133.1 lakh sq ft.

However, Delhi-NCR witnessed a 5 per cent fall in new supply to 46.8 lakh sq ft from 49.2 lakh sq ft.

In Chennai, the new supply fell 59 per cent to 21.7 lakh sq ft from 53.3 lakh sq ft.

Pune saw a dip of 27 per cent to 42.2 lakh sq ft from 57.4 lakh sq ft, while Hyderabad witnessed a fall of 21 per cent to 102.1 lakh sq ft from 128.6 lakh sq ft.

There was no fresh supply of office space in Kolkata during 2024 as against 13.2 lakh sq ft in the preceding year.

The fresh office supply in Ahmedabad declined 2 per cent last year to 22.1 lakh sq ft from 22.7 lakh sq ft in 2023 calendar year.

These eight markets reported a fall in new office supply, despite strong demand from global and domestic companies.

The gross leasing or absorption of office space rose 19 per cent to 885.2 lakh sq ft in 2024 from 745.6 lakh sq ft in the preceding year.

Gross leasing volume factors in all leasing activity in the market, including fresh take-up, open market renewals by corporates as well as pre-leasing.

The net office leasing also increased 21 per cent to 500.7 lakh sq ft last year from 412.3 lakh sq ft in 2023.

Net absorption is a barometer of real demand or expansion of occupied space in the market.

Cushman & Wakefield said it "expects to see a recovery in supply, with a considerable portion of it coming in the suburban markets across key cities".

Information Technology and Business Process Management (IT-BPM); engineering & manufacturing; and Banking, Financial Services and Insurance (BFSI) sectors are the major drivers of office space demand in India.