Pune’s office market grew by 19% in 2024, with 80 lakh square feet leased
In an impressive display of resilience, Pune’s office real estate market has registered a remarkable 19% growth in 2024. The city saw a total of 80 lakh square feet of office space leased during the year, according to recent data from Knight Frank India. This growth was primarily driven by a robust first half of the year, followed by a steady demand in the second half, despite global macroeconomic challenges. Leasing activity for the second half of 2024 accounted for 36 lakh square feet, highlighting the sustained demand across the city’s office real estate market.
One of the key drivers behind this uptick has been the shift towards Grade A office spaces, with developers pivoting towards high-quality offerings. Bharat Agarwal, President of Naredco Pune, noted that the increasing demand from technology firms has been a major contributor to the market’s performance. He explained that the migration towards Grade A office space is expected to continue, as these modern, tech-friendly spaces offer the amenities that large corporations are seeking. However, Agarwal did caution that global policy changes, such as those in the US, could have short-term impacts on demand. Despite these concerns, Pune’s office space market seems well-positioned for continued growth.
The city’s commercial leasing activity mirrored the larger national trend, where leasing in the top seven cities surged to an all-time high of 7.7 crore square feet, marking a 22.6% increase. Global firms have played a pivotal role in driving leasing activity, with India remaining a key focus for multinationals expanding their global capability centres. Samantak Das, Chief Economist at JLL, observed that global capability centres accounted for a significant 35.9% of India’s office leasing market in 2024. In Pune, flexible office spaces accounted for 35% of all leasing transactions, underscoring a shift in how companies approach office space solutions.
As Pune continues to grow, the demand for Grade A office spaces is expected to surge, with projections estimating that the city may exceed 10 crore square feet of such spaces in 2025. The city is already witnessing rental growth, with office rents increasing from Rs 73.5 per square foot per month in 2023 to Rs 77 per square foot in 2024. This moderate increase in rental values signals a recovery of sorts, as the market continues to outpace pre-pandemic levels. However, it is the increasing market share of co-working spaces and flexible offices that provides an intriguing glimpse into the future of office leasing in Pune.
Sustainability has increasingly become a focal point in the development of commercial office spaces, especially in cities like Pune. The growing emphasis on eco-friendly, energy-efficient buildings is set to shape the office leasing market in the years to come. Developers are now looking to integrate sustainable design features, such as solar panels, energy-efficient lighting, and smart building technology, into their office complexes. This shift not only aligns with global environmental goals but also helps companies reduce their carbon footprint. As Pune continues to develop into a leading business hub, the incorporation of sustainable practices into its office real estate will likely become a key selling point for tenants.
