India office rentals head north even as global markets face headwinds: Rpt

Research by Vestian showed that 2024 recorded the highest-ever leasing activity of 70.7 mn sq ft, marking an annual increase of 16%

Office rentals in India continued their upward trend, with rents rising between 3.8 per cent and 8.2 per cent year-on-year (Y-o-Y), even as global office markets remained under pressure in 2024, according to Vestian, a workplace solutions firm.

 

Vestian’s report showed leasing activity touched a record high of 70.7 million square feet in 2024, marking a 16 per cent annual increase. Sub-dollar rentals across India’s top seven cities played a key role, positioning the country as a rare bright spot in an otherwise subdued global landscape.

 

In contrast to cities like New York, Seattle, Boston, Hong Kong, and Shanghai — which have seen rents drop over the past five years — India has maintained a steady climb. While some Western markets such as London and Miami saw rent increases of 31 per cent and 53 per cent, respectively, the broader global trend remains weak, weighed down by rising vacancy levels and shifting workplace strategies.

   

Shrinivas Rao, chief executive officer of Vestian, said falling global office rents are being shaped by technologies like generative artificial intelligence and changes in how office spaces are used. Together, these trends have added to the uncertainty in the sector. Reduced demand, along with companies downsizing or relocating, has pushed up global vacancy rates and, in turn, driven rents down.

 

The report highlighted India’s resilience, with strong leasing demand from the information technology sector and global capability centres (GCCs). While global cities still attract interest in premium spaces, India stands out for its affordability and expansion-driven leasing activity.

 

Rao added that a wave of new businesses and corporate expansions has pushed demand for office space in India. Global firms are actively pursuing Indian office locations, drawn by faster economic growth compared to other large economies, a young and expanding workforce, rising urbanisation, and access to skilled talent, particularly in technology and finance, at competitive costs.

 

Premium commercial areas such as Mumbai’s Bandra Kurla Complex and Delhi’s Central Business District (Connaught Place and surrounding areas) command top rents, averaging $3–4 per square foot per month. Continued economic activity, major infrastructure developments, and the growing footprint of GCCs are all contributing to rising office rents across India’s major cities.