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India’s office market continued to scale up in 2025, with Grade A office leasing across the top seven cities surpassing 70 million sq ft. Leasing activity, in fact, touched 71.5 million sq ft, marking a 6% year-on-year growth. This sustained momentum underscores the strength of occupier demand, supported by strong economic growth, expanding Global Capability Centers (GCCs) footprint, and increasing preference for high-quality office assets.

Bengaluru continued to remain the most dominant office market, recording 22.1 million sq ft of leasing activity during the year, and accounted for nearly one-third of the pan-India demand. More importantly, office space demand remained strong across other major markets as well. Delhi NCR, Hyderabad, Chennai and Mumbai each registered close to or over 10 million sq ft of leasing, reflecting occupiers’ expanding real estate footprint across multiple markets and adding credence to the strong multi-city demand narrative.

In line with expectations, a strong Q4 provided the decisive push for the record-breaking performance in 2025. The last quarter witnessed an all-time high leasing activity of 20.6 million sq ft, representing a 20% increase over the previous quarter. In fact, Bengaluru saw its highest-ever quarterly leasing of 8.1 million sq ft, followed by 4.2 million sq ft of Grade A space uptake in Delhi NCR. Together, these two markets accounted for nearly 60% of the total leasing activity during Q4 2025, highlighting large deal closures and occupier expansion in these cities.

“India’s office market continues to scale up and set new highs every passing year. Grade A office space demand crossed 70 million sq ft in 2025, with all-time high space uptake in the last quarter. Q4 2025 alone saw over 20 million sq ft of space uptake and this reaffirms sustained occupier confidence across demand segments. With continued demand from GCCs, technology & BFSI firms and flex space operators, alongside a clear flight-to-quality, the office market outlook remains positive. Going ahead, we expect leasing activity to remain robust in 2026, supported by demand scale-up across major cities, increasing adoption of flexible & managed workspace solutions, and high traction in sustainable buildings,” said Arpit Mehrotra, Managing Director, Office Services, India, Colliers.

Trends in Grade A gross absorption (in million sq. ft.)

New supply remains steady; vacancy levels drop, and average rentals firm up across most cities

New supply across the top seven cities remained steady in 2025, with total supply additions reaching 56.5 million sq ft, a 5% increase over 2024. New supply was predominantly driven by select markets, with Bengaluru, Hyderabad, and Pune each recording over 10 million sq ft of new completions. These three cities together accounted for nearly 70% of the completions during the year.

On a quarterly basis, new supply moderated to 15.1 million sq ft in the last quarter, marking a 6% year-on-year decline. Notably, five of the seven major cities saw a YoY decline in new supply during Q4 2025. Completions, however, remained strong in Bengaluru and Hyderabad, with the cities cumulatively driving over 75% of the quarterly supply. With demand outpacing supply in recent times, overall vacancy levels fell by 49 basis points, while average rentals strengthened by up to 15% YoY across major cities.

Trends in Grade A new supply (in million sq. ft.)

Technology firms drive 37% of conventional space uptake in 2025; Flex space demand continues to witness sustained growth

Trends in conventional and flex space leasing (in million sq. ft.)

2025 witnessed 58.5 million sq ft of conventional office space uptake, led primarily by occupiers across the Technology sector. Technology firms alone leased nearly 22 million sq ft of conventional office space, a notable 32% YoY growth. Interestingly, office space demand continued to remain diversified in 2025, with around 25 million sq ft of conventional space uptake across BFSI, engineering & manufacturing, and consulting firms. These three demand sectors collectively accounted for more than 40% share in conventional leasing during the year. This also underscores the growing appetite for premium assets amongst occupiers across demand sectors.

On the flex space front, supported by hybrid work models, cost optimization, and the need for speed-to-market solutions, leading operators took 13.0 million sq ft of Grade A space in 2025, slightly higher than the flex space uptake in 2024. Flex space operators accounted for nearly 18% of India’s total office leasing in 2025. While Bengaluru and Delhi NCR led Pan India flex leasing, flex adoption was also notably strong in Pune and Chennai, where over 20% of the annual office leasing of the city was driven by flex space operators.

“Technology firms continued to drive commercial real estate in India, accounting for over 40% of the demand in both conventional as well as flex spaces during the last quarter. In fact, of the 7 million sq ft of conventional space uptake by technology firms during Q4 2025, large-sized deals accounted for almost two-thirds of the leasing activity. Interestingly, the ongoing demand diversification is evident in flex spaces as well, with high traction across end-users from the BFSI and Engineering & Manufacturing sectors. With leading operators likely to expand aggressively and ramp up their offerings in Tier II cities, we expect almost one-fifth of the office space demand to come from flex space operators in 2026 and beyond,” said Vimal Nadar, National Director and Head of Research, Colliers India.

GCC leasing gains traction, driving over 40% of the demand during 2025

GCCs in India have moved well beyond traditional back-office roles, establishing themselves as major centers for research, product development, advanced analytics, AI, ML, and cloud computing. Despite global uncertainties and trade frictions, GCC leasing has grown significantly over the past few years, with 2025 alone witnessing close to 30 million sq ft of Grade A space uptake. Moreover, skilled talent availability, policy level push and cost arbitrage driven by recent rupee depreciation will keep GCC leasing upbeat and strengthen the Indian office market over the next few years.

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