Lucknow: India’s top eight commercial markets have witnessed significant growth in 2024, with the average transaction size increasing by 10.24%, rising from 37,976 square feet in 2023 to 41,867 square feet in 2024, according to a Knight Frank India survey released on Saturday.
Hyderabad: Leading the Charge
Hyderabad emerged as the frontrunner, boasting the largest average contract size for office spaces at 70,535 square feet, a 10.13% increase from 64,042 square feet in 2023. The city’s success can be attributed to:
- Quality of Life: Hyderabad offers modern conveniences at a more affordable cost compared to other major cities, enhancing its desirability.
- Infrastructure: Expanding commercial zones and excellent transportation networks make it an attractive destination for both domestic and international businesses.
Mumbai: Record-Breaking Growth
Mumbai experienced the highest year-over-year percentage increase in average transaction size among the eight cities, growing by an impressive 54.59%.
- Transaction Size: The financial capital’s average contract size increased from 25,971 square feet in 2023 to 40,150 square feet in 2024.
- Infrastructural Boost: Transformative projects such as the operationalization of key metro lines, including the Bandra Kurla Complex (BKC) metro, have significantly improved accessibility, attracting larger occupiers.
- Positive Occupier Sentiment: Enhanced physical occupancy levels and a strengthening economic climate contributed to increased demand for premium office spaces.
Key Drivers of Growth
The surge in average transaction sizes across cities is driven by a growing demand for better office spaces with longer lease terms and higher tenant investment. Other contributing factors include:
- A focus on enhanced workplace environments.
- Strengthened transportation infrastructure.
- Economic growth and increased business confidence.
National Trends and Future Outlook
India’s commercial real estate sector continues to evolve, with $11.4 billion invested in the market in 2024. The demand for premium office spaces with modern amenities highlights the shifting priorities of businesses towards larger, better-equipped workspaces.
The increasing transaction sizes and infrastructural developments indicate robust growth in the sector, with cities like Hyderabad and Mumbai setting benchmarks for commercial real estate trends nationwide.
