Net absorption of office space, often considered a surrogate for white collar job creation, reached a historic high of 49.56 million square feet in 2024, up 17 per cent from 2023.

A report by property consultants JLL said the surge was led primarily by Bengaluru, the country’s tech capital, which reported a staggering 63.6 per cent growth despite a high base.

In contrast, net absorption in Calcutta fell 12 per cent. The saving grace for the city: at 1.19 million square feet, which is less than one-tenth of Bengaluru, it was still the second highest ever since JLL started keeping records in 2001.

Samantak Das, chief economist and head of research and REIS, JLL India, attributed the national growth to the brisk activities of international companies, which drove 58.6 per cent of absorption in 2024 as India remained central to their real estate expansion.

“Global capability centres (GCCs) had a standout year, capturing 35.9 per cent of the market with approximately 28 million square feet leased,” Das said.

Apart from Bengaluru, Delhi-NCR, Mumbai and Hyderabad recorded growth in net absorption, while it fell in Pune and Chennai along with Calcutta. However, with 14.74 million square feet of net absorption, Bengaluru has firmly established its market leading position. (See chart).

JLL noted that the tech sector’s partial recovery, claiming 25.8 per cent of demand, alongside a robust BFSI and manufacturing/engineering presence, reflects the market’s diverse strength. Flex leasing operators, who offer plug and play models to occupiers, accounted for 15 million square feet, which accounted for 19.8 per cent share of the net absorption.

“As we look ahead, the expansion of GCCs in core markets will be pivotal, with quality real estate assets and talent availability driving this growth. With changing workplace dynamics fuelling occupier demand, particularly in financial services, manufacturing, and tech outsourcing, India’s office market is poised for continued upward momentum,” said Rahul Arora, head - office leasing & retail services, senior managing director (Karnataka, Kerala), India, JLL.

JLL calculates net absorption as the new floor space occupied less floor space vacated. Floor space that is pre-committed (sold in some cases) is not considered to be absorbed until it is physically occupied.

The record leasing activities resulted in decline in vacancy level. Overall vacancy across the top 7 cities dropped to a three-year low of 16.3 per cent and was down by 60 basis points quarter-on-quarter.

The historic high net absorption amid balanced supply in 2024 has supported the vacancy decline. Vacancy was down q-o-q across all cities, barring Pune.