India Tops APAC Office Leasing as Demand Hits 8.8 Million Sqm

Office space demand across the top 11 Asia Pacific (APAC) markets surged by 15.9 per cent year-over-year in 2024, reaching 8.8 million square meters (94.7 million square feet). India, Mainland China, and Japan led this expansion. The second half of 2024 saw particularly strong activity, with total demand hitting 4.7 million square meters (50.6 million square feet), reflecting a 6.1 per cent increase compared to the same period in 2023. Leasing momentum, however, remained sluggish in New Zealand, the Philippines, South Korea, Hong Kong, and Taiwan.

Colliers' latest report, Asia Pacific Office Market Insights H2 2024 and Outlook 2025, attributes the surge in office space demand to corporate expansion, return-to-office policies, and the growth of global capability centers (GCCs). The report analyzed key markets, including Australia, Mainland China, Hong Kong, India, Indonesia, Japan, New Zealand, the Philippines, Singapore, South Korea, and Taiwan.

India remained the most active leasing market, with 6.17 million square meters (66.4 million square feet) transacted in 2024. The second half of the year accounted for 3.44 million square meters (37.0 million square feet), an 11 per cent increase year-over-year. Bengaluru and Hyderabad dominated Grade A space demand and supply, accounting for over half of India's leasing activity in H2 2024.

Technology firms and flex space operators accounted for 46% of total space absorption across the top six Indian cities. New supply remained strong, with 2.81 million square meters (30.3 million square feet) of fresh completions in H2 2024, reflecting 7 per cent annual growth. Despite increased supply, India’s office vacancy rate remained stable at approximately 17 per cent.

APAC’s overall office market remained positive, with demand growing by 6.1 per cent year-over-year in H2 2024. While leasing activity in Australia saw significant expansion on a lower base, new office supply across most APAC markets declined by 16.9 per cent annually. India, however, diverged from this trend, contributing 60 per cent of the new supply in the region and experiencing a 7 per cent increase year-over-year.

Arpit Mehrotra, Managing Director, Office Services, Colliers India, stated, "APAC’s office demand growth was largely driven by India, China, and Japan. India, in particular, continued to lead leasing and supply, contributing a significant share of the region’s total transactions. We expect improved demand-supply balance in 2025, supported by economic stability and moderating inflation."

Vimal Nadar, Senior Director & Head of Research, Colliers India, highlighted India’s strength, noting, "With a 70 per cent share in leasing and 60 per cent of new supply in H2 2024, India remains a key player in the APAC office market. GCCs drove 1.4 million square meters (~15 million square feet) of leasing during the period, accounting for over 40 per cent of total transactions. Favorable factors such as rental arbitrage, skilled talent, and language capabilities will continue to attract GCCs and outsourcing hubs to India."

Colliers anticipates steady demand and supply growth across APAC in 2025, with vacancy rates expected to remain stable.

"The office occupier market outlook remains optimistic, with sustained demand shaping leasing trends. High-activity regions may see continued rental growth, particularly in peripheral business districts. The shift toward modern, flexible, and sustainable office spaces will continue, with businesses prioritizing collaboration and efficiency," said Mike Davis, Managing Director of Occupier Services, Asia Pacific.