The Business Bytes
Bangalore, November 8, 2024 (TBB Bureau): The Asia Pacific office market is forecasted to experience notable growth in 2025, with Colliers’ latest data indicating a 10.7% year-on-year (y-o-y) surge in office demand across top regional markets during Q3 2024.
According to the Colliers’ Asia Pacific Office Market Insights Q3 2024 report, demand for Grade A office space reached 2.2 million sqm (23.7 million sq ft) this quarter. Major Asia Pacific markets showed strong performance, positioning the region for a robust 2025.
Countries like India, New Zealand, and Singapore demonstrated exceptional momentum, with annual office leasing growth surpassing 30%. India led the APAC region with 1.61 million sqm (17.3 million sq ft) of leased office space, accounting for over 70% of the region’s Q3 2024 demand, followed by China at 17%. Within India, Bengaluru and Hyderabad emerged as key players, contributing significantly to the uptake of Grade A office space. Additionally, new office supply in India increased by 1.34 million sqm (14.4 million sq ft) this quarter, keeping vacancy rates stable at around 17%.
“Driven by strong demand and high occupier interest in premium office spaces, average rentals in major Indian markets are on an upward trajectory, increasing by up to 10% annually as of Q3 2024,” said Arpit Mehrotra, Managing Director of Office Services at Colliers India. “The Indian office market is moving towards an expansion phase, where rents are expected to strengthen further. While rental growth varies across cities, India aligns closely with other growth markets like Australia, Japan, and New Zealand. With competitive rental rates and diverse occupier interest, India continues to solidify its standing in APAC.”
The demand for premium, ESG-aligned office spaces underscores a “flight to quality” across the APAC region, particularly in India. Occupiers are increasingly opting for best-in-class facilities and green-certified workspaces, pushing developers to integrate sustainable features into new projects. According to Vimal Nadar, Senior Director & Head of Research at Colliers India, “India could potentially see 5-6 million sqm (54-64 million sq ft) of Grade A space uptake in 2024, underscoring its role as a major player in APAC’s commercial real estate landscape.”
Mike Davis, Managing Director of Occupier Services for APAC at Colliers, added, “As we look ahead to 2025 and beyond, the APAC office market’s growth is bolstered by occupiers’ evolving focus on productivity, sustainability, and innovative workspace solutions.”
In the coming quarters, project completions in major APAC markets could further bolster supply. However, overall rental rates are expected to remain balanced as supply-demand dynamics stabilize across the region.
