Southern Office Markets Lead In Net Office Absorption In 2024

Overall, 2024 emerged as a transformative year for the office real estate market, characterized by robust absorption, strategic expansion by diverse sectors, and strong rental growth across major markets, particularly in the southern region - Peush Jain, Managing Director, Commercial Leasing and Advisory, Anarock Group

Hyderabad: Southern office markets are leading in office space absorption by capturing 55 per cent of the total 50 million sft absorption, followed by western markets at 24 per cent and NCR at 19 per cent.

According to the latest Anarock report, ‘India Office Market CY 2024,’ southern markets, particularly Bengaluru and Hyderabad continue to dominate the net office absorption landscape. Bengaluru leads with 34 per cent y-o-y growth at 14.9 million sft, followed by Hyderabad with seven per cent y-o-y growth at 7.5 million sft. Both the cities collectively account for 45 per cent of total absorption.

The average office vacancy has dropped to 16.5 per cent in 2024, from 17.8 per cent in 2023. Among the top seven cities, Chennai exhibited the strongest fundamentals with the lowest office vacancy of 9.3 per cent. Hyderabad emerged as the city with the highest vacancy rate at 26.5 per cent, an increase of 1.3 per cent from 2023.