Commercial Real Estate Demand Soars Due To Tech Giants in 2024

17 January 2025

India’s commercial real estate sector is experiencing huge growth, particularly in office space demand, with major technology firms expanding their footprints in key urban centers. Notably, Google has entered into a lease agreement for 550,000 square feet of office space with managed workspace provider Table Space in Gurugram. This deal includes an option to lease an additional 200,000 square feet, potentially increasing the total space to 750,000 square feet.

This move follows Google’s substantial leasing activities in other Indian cities. In 2024, the company leased approximately 649,000 square feet of office space in Bengaluru’s Alembic City. Additionally, Google renewed a 600,000 square foot lease in Hyderabad in 2022 and secured a 1.3 million square foot deal with Bagmane Developers in Bengaluru.

The demand for Grade A office space in India is being driven by several factors, including the return-to-office trend among technology firms, the rise of new global capability centers (GCCs), an increase in flexible workspace operators, the growth of unicorn startups, and the continued expansion of major tech companies. According to real estate consultancy Cushman & Wakefield, office space leasing in India is projected to reach a record 83-85 million square feet in 2024, representing a 13% increase over the previous peak in 2023. India has established itself as a global leader in office leasing, surpassing markets such as the US and China. Within the Asia-Pacific region, India is expected to account for nearly 70% of total net absorption by the end of the year.

These developments underscore the robust expansion of India’s commercial real estate landscape, driven by increasing office space demand and strategic investments by major technology firms in key urban centers.

India’s commercial real estate sector is experiencing significant growth, particularly in office space demand, with Bengaluru leading the surge. In 2024, the city achieved a record office leasing absorption of 21.7 million square feet, marking a 40% annual increase.

This robust performance underscores Bengaluru’s status as a premier destination for global corporations, especially within the technology sector.

The city’s appeal is further highlighted by substantial investments from international firms. For instance, Delta Electronics, a Taiwanese company, plans to nearly double its workforce in India over the next five years, focusing on expanding its research and development capabilities in Bengaluru.

Similarly, German optical technology firm Carl Zeiss AG has launched its first global capability center in Bengaluru, with plans to double its local workforce to 5,000 over the next three years.

These developments strongly indicate the city’s growing importance as a hub for technological innovation and corporate expansion.

In parallel, Mumbai’s commercial real estate market is witnessing notable developments. Prestige Estates Projects Ltd. is advancing its mixed-use project, Prestige BKC 101, in Mumbai’s Bandra-Kurla Complex (BKC). This project sets a new benchmark in sustainable commercial properties, aligning with the company’s strategy to diversify its portfolio and tap into Mumbai’s dynamic real estate market.

These trends indicate a robust expansion in India’s commercial real estate landscape, driven by increasing office space demand and strategic investments in key urban centers.

Sources: Economic Times, REUTERS, Hindustan Times, Times of India