Surge in Southern Cities: India's Office Real Estate Boom

India's office real estate market has witnessed a significant upswing, with southern cities leading in rental growth and space absorption. Anarock's report highlights Bengaluru, Chennai, and Hyderabad's dominant role over six years, driven by robust IT infrastructure and skilled workforce, making them attractive for corporate investments.

The Indian office real estate market is experiencing a remarkable surge, attributed to unprecedented demand since 2019. A recent report from ANAROCK, a prominent real estate consultancy firm, reveals that the southern cities have eclipsed other regions in office market dynamics, particularly in net absorption and new supply addition over the past six years.

According to ANAROCK Research, Bengaluru, Chennai, and Hyderabad lead in office rental increases, with up to a 26% rise between 2019 and 2024. Bengaluru tops the list with rents climbing from Rs 74 to Rs 93 per sq. ft., followed by Hyderabad and Chennai at 25% and 20% growth, respectively.

In contrast, northern regions like NCR saw minimal rental growth during the same period, while western cities, including Pune, fared slightly better. Office vacancies have decreased to 16.5% in 2024, despite substantial new supply, underscoring the sustained demand led by the technology sector and flexible workspaces.