India’s top 7 cities record 4% to 8% rental surge in office rents in 2024, global markets show mixed trends: report

India real estate market's commercial segment remains on a growth trajectory, due to economic resilience and business expansion, the report said

Office rentals across India's top seven cities recorded a year-on-year increase of 4% to 8% in 2024, reflecting strong demand in the commercial real estate segment, according to a report released by real estate consultancy Vestian.

Office rentals across India's top seven cities recorded a year-on-year increase of 4% to 8% in 2024. (Picture for representational purposes only) (Pexels)

The surge of rentals in the report is attributed to India’s robust economic performance, growing urbanisation, and an expanding base of global companies seeking high-quality office spaces.

On the other hand, eight key global office markets showed a mixed trend in rental movement during the same period, the report said.

Global scenario

Among international markets, office rents declined in several major cities. New York saw a 1.3% dip in average office rent, settling at $ 7.5 per sq ft per month.

The consultancy firm has considered conversion rate of US dollar to Indian rupees at ₹86.

Shanghai recorded a 6.8% drop in office rentals to $ 2.8 per sq ft, while Hong Kong experienced a 6% decline to $ 5.9 per sq ft.

Seatlle also witnessed a decrease of 1.9%, with average monthly rent at $ 4.7 per sq ft. In contrast, London’s office rents surged 8.6% to $ 8.6 per sq ft per month, followed by Miami with a 7.3% rise to $ 5.1 per sq ft, the report stated.

According to the report, Boston registered a modest 1.2% increase, taking the rent to $ 5.5 per sq ft, while Singapore saw a marginal 0.5% rise to $ 7 per sq ft.

Indian scenario

In India, Delhi registered the highest annual increase in office rent among major cities, rising 8.2% to $ 0.9 per sq ft per month.

According to the report, Mumbai followed Delhi with a 6.7% jump to $ 1.6 per sq ft. Chennai saw a 7.7% hike to $ 0.8 per sq ft, while Bengaluru posted a 4.7% increase to $ 1.1 per sq ft.

Pune and Hyderabad recorded annual rental growth of 4.5% and 4.4%, reaching $ 1 and $ 0.8 per sq ft respectively. Kolkata witnessed the lowest annual growth among the seven cities at 3.8%, with average monthly office rent at $ 0.6 per sq ft, the report said.

Why India's commercial real estate market better than other countries?

According to Vestian CEO Shrinivas Rao, the correction in some global office markets is largely influenced by evolving workplace models and the impact of new technologies such as generative artificial intelligence (AI), which are changing how businesses use office spaces.

However, India remains on a growth trajectory, with demand for office space increasing due to economic resilience and business expansion.

Rao said that global firms are increasingly looking at India as a strategic office location, driven by the country’s large pool of skilled professionals, competitive costs, demographic advantages, and a fast-growing consumer market.

"This trend is particularly evident in sectors such as technology and finance," Rao said.

He said that the demand for premium office spaces is intensifying, especially in key commercial hubs like Mumbai’s Bandra-Kurla Complex (BKC) and Delhi’s central business district, including Connaught Place, where rents have reached $ 3–4 per sq ft per month.