NEW DELHI: The average rentals have surpassed the pre-pandemic levels (2019) across all the six major office markets for the first time in 2024, according to a report by Colliers India.
The grade-A office space has seen a new all-time-high since 2022. Hyderabad and Pune achieved pre-pandemic rental levels in 2022 itself.
Bengaluru and Chennai reached 2019 rental levels in 2023, Delhi-NCR and Mumbai completed the recovery cycle finally in 2024. Delhi-NCR was amongst the last cities to reach pre-pandemic levels.
Delhi-NCR and Pune saw the highest rise in average rentals at about 8% each during the 2019-2024 period followed by Mumbai and Chennai with about 5-6% rise in the same period.
Arpit Mehrotra, managing director, office services of the company said, “Moreover, as demand scale-up in Indian commercial real estate solidifies, notwithstanding unforeseen events, annual space take up to the tune of 60 million sq ft is likely to be the new norm in the medium-term.”
Interestingly, select core micro markets across the top six cities have witnessed upto 25% rental growth during the 2019-2024 period.
These micro markets have seen high demand across occupier segments, thus witnessing higher rental growth compared to 2-8% city-level appreciation during the same period.
Core micro markets in Delhi-NCR such as Golf Course Extension Road, Noida Expressway and Cyber City have witnessed up-to 25% rise in rentals during the last five years.
High activity micro markets of Bengaluru such as outer ring road (ORR) and Whitefield have witnessed a surge of 5-10% as compared to the 2% city-level rental growth during 2019-2024 period.
| City | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | Rental Change 2024 vs 2019 |
| Bengaluru | 94.5 | 95.2 | 90.6 | 90.6 | 94.7 | 96.7 | 2.3% |
| Chennai | 74.0 | 74.0 | 74.1 | 73.6 | 74.5 | 77.8 | 5.1% |
| Delhi-NCR | 97.8 | 93.2 | 90.5 | 93.2 | 96.8 | 105.9 | 8.3% |
| Hyderabad | 73.4 | 73.4 | 73.4 | 73.7 | 75.2 | 76.7 | 4.5% |
| Mumbai | 143.3 | 138.5 | 137.3 | 140.5 | 142.5 | 151.6 | 5.8% |
| Pune | 75.8 | 74.7 | 74.2 | 76.4 | 77.4 | 81.6 | 7.7% |
| Pan India | 99.5 | 97.1 | 94.8 | 94.9 | 96.5 | 101.3 | 1.8% |
*City-wise Weighted Average Quoted (WAQ) rental trends (in Rs/sq ft)
Similarly, office rentals in other core micro markets such as OMR Zone 1 in Chennai and Goregaon/JVLR & BKC in Mumbai too have surged by 10-20% from pre-pandemic levels.
“Since 2019, cumulative demand and supply across the six major office markets of the country have been recorded at 264 and 234 million sq ft respectively. With overall demand and supply mirroring each other, vacancy levels are anticipated to be range bound across most cities. Average office rentals meanwhile can further firm up and witness up-to 10% annual growth across key cities in 2024”, said Vimal Nadar, senior director and head of research, Colliers India.
Mumbai, with a demand-supply ratio of 2.1, has witnessed a significant drop in vacancy levels since 2019, as demand has outpaced supply significantly.
Similarly, in Delhi-NCR, with demand exceeding supply on a consistent basis, vacancy levels have dropped from around 25% a few years ago to about 20% currently.
Hyderabad, on the contrary, has traditionally been a high-supply market and this has driven vacancy levels upwards constantly; current vacancy levels in the city are around 25%.
