According to the latest edition of Colliers’ Expert Insights | Asia Pacific Office Markets April 2024, occupiers across major markets in India are displaying a willingness to pay higher rentals for superior quality office spaces. This trend is indicative of a shift towards prioritizing quality over cost-consciousness, particularly in locations conducive to talent acquisition.
The report underscores the evolving mindset of business leaders in the Asia Pacific region, who are increasingly focused on optimizing resources, maximizing savings, and driving growth amidst a dynamic business landscape in 2024.
In India, top office markets have witnessed a notable surge in rentals, ranging between 4-8% year-on-year (YoY), driven by robust demand and the introduction of high-end, quality office spaces. Following a period of subdued demand during the pandemic years, marked by occupier exits and remote work trends, rentals have rebounded strongly in 2024, surpassing pre-pandemic levels.
The resurgence in rental prices can be attributed to the robust economic growth and renewed confidence among occupiers in India. Notably, select high-performing markets across the top 6 cities have experienced an up to 20% YoY rental increase. Examples include MG Road in Delhi NCR (18.2% YoY), SBD1 (encompassing Koramangala, CV Raman Nagar, IRR, Indiranagar, Old Airport road, Old Madras Road, Rajajinagar, and others) in Bengaluru (15.5% YoY), and Pallavaram Thoraipakkam Road (PTR) in Chennai (10.9% YoY).
This surge in rental prices underscores the growing preference among occupiers for buildings equipped with state-of-the-art amenities and modern features, coupled with green certifications, in strategic locations. The new office supply, distinguished by superior quality construction and high-end amenities, commands rents up to 20% higher than average rentals across select premium micro markets.
Pan India Weighted Average Quoted (WAQ) rental trends (2019-2024)
| 2019 (pre-pandemic) | 2020 | 2021 | 2022 | 2023 | Q1 2024 | Q1 2024 vs 2019 (% Change) | |
| Bengaluru | 94.5 | 95.2 | 90.6 | 90.6 | 94.7 | 95.5 | 1.1% |
| Chennai | 74.0 | 74 | 74.1 | 73.6 | 74.5 | 77.4 | 4.6% |
| Delhi NCR | 97.8 | 93.2 | 90.5 | 93.2 | 96.8 | 101.5 | 3.8% |
| Hyderabad | 73.4 | 73.4 | 73.4 | 73.7 | 75.2 | 75.2 | 2.5% |
| Mumbai | 143.3 | 138.5 | 137.3 | 140.5 | 142.5 | 156.1 | 8.9% |
| Pune | 75.8 | 74.7 | 74.2 | 76.4 | 77.4 | 79.7 | 5.1% |
| Pan India | 99.5 | 97.1 | 94.8 | 94.9 | 96.5 | 100.5 | 1.0% |
Source: Colliers
Weighted Average Quoted (WAQ) Rents are in INR per square feet per month for warm shell offices and do not include
common area maintenance (CAM) or taxes
Rental figures as of 31 Dec of every year except for Q1 2024
Pan India Weighted Average Quoted (WAQ) rental trends (Q1 2024)
| Q1 2023 | Q1 2024 | Q1 2024 vs Q1 2023 (% Change) | |
| Bengaluru | 91.8 | 95.5 | 4.0% |
| Chennai | 72.9 | 77.4 | 6.2% |
| Delhi NCR | 93.3 | 101.5 | 8.8% |
| Hyderabad | 73.6 | 75.2 | 2.2% |
| Mumbai | 150.1 | 156.1 | 4.0% |
| Pune | 76.4 | 79.7 | 4.2% |
| Pan India | 96.5 | 100.5 | 4.1% |
Source: Colliers
Weighted Average Quoted (WAQ) Rents are in INR per square feet per month for warm shell offices and do not include
common area maintenance (CAM) or taxes
Rental figures as of 31 Dec of the respective year
Rental comparison of new office supply with average market rents
| City | Prominent Micro market | New Supply (2022-24 in msf) | Quoted rental of new supply(2022-24) | Quoted rental in the micro market(Q1 2024) | Rental price premium* |
| Bengaluru | ORR1 | 8.8 | 110-115 | 103-108 | 5-10% |
| Chennai | Mount Poonamallee High Road (MPR) | 2.4 | 80-85 | 78-83 | 2-7% |
| Delhi | Gurugram – NH-48 | 5.7 | 140-145 | 118-123 | 15-20% |
| Hyderabad | SBD2 | 13.9 | 78-82 | 78-82 | 0-5% |
| Mumbai | Central Mumbai3 | 2.2 | 280-285 | 222-227 | 20-25% |
| Pune | CBD4 | 1.9 | 103-108 | 98-103 | 3-8% |
Source: Colliers
Data pertains to Grade A properties
Supply indicates new supply completions during 2022-Q1 2024
*Price premium indicates the rental difference of the new supply during 2022-Q1 2024, over the quoted rentals of the micro markets
Prominent MMs have been chosen basis demand actvity and infusion of new supply during 2022-Q1 2024
Micro market definitions –
1- Outer Ring Road stretches from Silk Board to Hebbal
2- SBD- Madhapur, HITEC City, Kondapur and Rai Durg
3- Central Mumbai – Lower Parel, Prabhadevi/Worli
4- CBD- Bund Garden Road, Camp, FC Road, JM Road, Koregaon Park, Kalyani Nagar, Shivaji Nagar, Swargate, Raja Bahadur
Mills Road, Senapati Bapat Road, Wakdewadi, Yerwada
The report also highlights six priorities to achieve cost efficiency in office real estate.
- Align office strategy to business goals: Decisions around owning versus leasing should be aligned to location objectives and expected length of requirement for each office.
- Portfolio strategy: Consolidation opportunities, monetising non-core assets, along with right-sizing and repurposing offices to match new ways of working, is key to thriving in today’s dynamic environment.
- Maximise lease negotiations: Consider shorter-term and coworking options to minimise up-front costs. Renegotiate leases and contracts.
- Data-driven space utilisation: Leverage technology to automate routine tasks, track space utilisation to enhance overall operational efficiency.
- Prioritise energy efficient systems and upgrade: Achieving long-term cost savings by prioritising sustainability initiatives and green building practices.
- Drive employee engagement and satisfaction: Ensure a positive work environment to drive employee engagement, satisfaction and productivity.
“In response to evolving market dynamics, office occupiers in India are revolutionizing their cost optimization strategies, by embracing hub-and-spoke model, expanding flex space portfolios, and leveraging technology. Suburban and peripheral areas, offering affordability, are witnessing heightened demand, indicating a preference of sub-dollar or near-dollar markets. Flex spaces, especially with the rise of core-plus-flex models, are gaining prominence. At 8.7 million square feet of leasing in 2023 and highest ever space takeup by flex spaces, the segment has witnessed remarkable expansion in recent years. Flex spaces are likely to continue the momentum in 2024, and is expected to constitute 15%-20% of total office leasing across the top 6 cities, underscoring occupiers’ pursuit of agile, cost-effective solutions to meet their evolving workspace needs.” said Arpit Mehrotra, Managing Director, Office services, India, Colliers.
Further, Asia Pacific is benefitting from more cost-conscious occupiers on a global scale, with greater uptake from Global Capability Centers (GCCs), particularly in markets such as India.
India’s Global Capability Centers- offering a compelling value proposition for global corporates
With global corporates increasingly seeking to optimize resources, maximize savings, and drive growth, India offers a compelling proposition. During Q1 2024, India continued to witness traction in GCC leasing activity. A significant 5 million square feet (msf) of leasing activity by GCCs, represented 37% of total office leasing across the top six cities. Looking ahead, GCCs are projected to lease between 45-50 msf of office space in the next two years, constituting around 40% of total demand. Heightened GCC activity is fueled by diverse occupiers spanning sectors such as BFSI, Technology, Engineering & manufacturing, and healthcare. Additionally, there’s a persistent preference for green-certified Grade A office spaces . Sub and near dollar micro markets remain pivotal for GCC space uptake in India, contributing nearly 80% of the leasing activity in 2019-23.
“India’s ascent as a premier GCC hub in the APAC region underscores its unmatched value proposition for global corporates. In the next 3 years, the projected leasing of 45-50 million square feet (msf) of office space by GCCs is poised to further solidify India’s position, driving over 40% of the country’s office leasing activity. Fueled by a robust talent pool, strategic location, and a steadfast commitment to sustainability, India remains a beacon for diverse occupiers aiming to foster innovation and fuel growth. Moreover, with over 150 msf of office supply at various stages of construction in the next three years, India continues to offer a plethora of high-quality office spaces at competitive prices, catering to the diverse needs of occupiers.”, said Vimal Nadar, Senior Director and Head of Research, Colliers India.
