Pune witnesses historic high in annual office transactions in 2024; Residential sales also hit all time high in the city

Pune, 7th January 2025: Knight Frank India in its latest report, India Real Estate: Office and Residential (July – December 2024) cited that Pune’s office market showcased remarkable growth in 2024, recording a total leasing activity of 8 mn sq ft, reflecting a 19% YoY growth, recording its best ever year for office transactions. This impressive performance was driven by a strong first half, with steady demand maintaining momentum in the second half, despite some recalibrations. Leasing activity during H2 2024 stood at 3.6 mn sq ft. Office rentals increased by 5% YoY during 2024.

Pune saw an addition of 5.7 mn sq ft of new office space in 2024, marking a significant 58% YoY growth. Of this, 3.3 mn sq ft were introduced in H2 2024, reflecting growing confidence among developers. Of the total transactions in 2024, flex transactions accounted for 35% of the total share in the city’s office space transactions.

The Pune residential market also achieved a record high of 52,346 units sold in 2024, reflecting a 6% YoY growth. Additionally, the weighted average price of residential units in Pune rose by 6% YoY, reaching INR 4,778 per sq ft. The ticket size category of INR 5 mn – 10 mn witnessed the highest sales in the city contributing 45% of total sales in the city with 23,798 units being sold in 2024.

Office Market Update: January – December 2024

Pune Office Market Summary

Pune’s commercial office market recorded its highest leasing activity since 2005, with approximately 8 mn sq ft of office space leased in 2024, marking a 19% YoY growth compared to 6.7 mn sq ft in 2023.The surge in demand was primarily driven by the flex sector, followed by India-facing businesses. The growth in Flex space transactions in Pune is attributed to the expanding startup ecosystem and the rising adoption of hybrid work models. At the same time, India-facing businesses are driving demand for traditional office spaces as they continue to expand their operations in the city.

Pune market witnessed major leasing activity by Flex office spaces capturing 35% of the area transacted at 2.8 mn sq ft and witnessed a staggering YoY growth of 112% from 1.3mn sq ft of transactions in 2023.This was followed by India facing business capturing 31% of the area transacted, respectively at 2.5 mn sq ft which when compared to last year was 1.8 mn sq ft a growth of 41%. Pune also experienced a consistent rise in GCC setups, particularly in SBD East and Kharadi, driven by its skilled talent pool and cost benefits. In 2024, GCCs represented 19% of the total transaction share.

Source: Knight Frank Research

Top of Form

In terms of office rents, Pune’s office market saw moderate growth in 2024, surpassing pre-pandemic levels with a 5% YoY increase. Rents rose to INR 77 per sq ft per month in 2024, up from INR 73.5 per sq ft per month in 2023. This upward trend underscores sustained occupier demand, particularly in prime locations.

P Vilas, National Director – Occupier Services, Capital Markets and Branch Head – Pune at Knight Frank India said, “Pune’s office market continues to thrive by adapting to evolving occupier needs. With increasing focus on flexible workspaces, hybrid models, and sustainability, the city is well-positioned to tackle future challenges. Infrastructure improvements, coupled with sustained demand from sectors like BFSI, and IT/ITeS, are projected to fuel further growth in 2025, solidifying Pune’s position as one of India’s most dynamic and resilient office markets.”

Residential Market Update: January – December 2024

In 2024, Pune’s real estate market demonstrated continued growth, marking the highest residential sales since 2010. The second half of the year contributed significantly, with 27,821 units sold compared to 24,525 units in the first half. This growth was driven by strong demand from IT professionals, ongoing infrastructure development, and shifting buyer preferences. Pune continues to establish itself as a dynamic real estate hub, offering a blend of affordability and premium options.

The residential market in Pune experienced a strong influx of new project launches reaching an all-time high in 2024 with a total of 59,548 units introduced, indicating a 40% YoY increase, highest growth amongst the eight cities in India. Launches in H2 2024 also reached an all-time high with 31,501 units being launched in the second half of the year with a YoY increase of 49% from 21,203 units in H2 2023.

Pune Residential Market Summary

Note: 1 square metre (sq m) = 10.764 square feet (sq ft), Source: Knight Frank Research

In 2024, Pune’s housing segment, with ticket sizes ranging from INR 100-200 mn (INR 10 – 20 Cr), saw the highest YoY growth, increasing by 122% from 8 units in 2023 to 18 units. The housing segment with ticket sizes between INR 20 – 50 mn (INR 2 – 5 Cr), experienced the second-highest YoY growth of 68%, rising from 1,289 units in 2023 to 2,166 units in 2024. The mid-range segment (INR 5-10 mn) continued to dominate Pune’s market, recording the highest number of units sold, with 23,798 units in 2024.

Ticket-Size Split of Sales

Source: Knight Frank Research

Pune’s inventory levels rose by 18% YoY in 2024, primarily due to an increase in supply. Despite this growth, the Quarters to Sell (QTS) metric remained strong at 3.7 quarters, indicating faster absorption rates and robust buyer demand.

P Vilas, National Director, Occupier Services, Capital Markets and Branch Head, Pune, Knight Frank India said, “Pune’s residential market is set for continued growth, driven by strong demand from end-users, ongoing infrastructure improvements, and an emphasis on lifestyle-oriented housing solutions. As developers adjust supply to match changing buyer preferences, Pune continues to be a significant player in India’s real estate sector. Infrastructure projects like the Metro Corridor and expanded road networks have greatly enhanced connectivity across the city, boosting buyer interest in emerging residential areas. These developments are further enhancing Pune’s market dynamics.”