India’s office market scales new peak in 2025; rentals rise, vacancies tighten

Bengaluru: 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 touched 71.5 million sq ft during the year, marking a 6% year-on-year growth. This sustained momentum underscores strong occupier demand, supported by robust economic growth, an expanding Global Capability Centers (GCCs) footprint, and a growing preference for high-quality office assets.

Bengaluru remained the most dominant office market, recording 22.1 million sq ft of leasing activity and accounting for nearly one-third of pan-India demand. Importantly, demand strength was not limited to a single city. Delhi NCR, Hyderabad, Chennai and Mumbai each registered close to or over 10 million sq ft of leasing during the year, reflecting occupiers’ expanding real estate footprint across multiple markets and reinforcing the multi-city demand narrative.

A strong fourth quarter provided the decisive push for the record-breaking performance in 2025. Q4 witnessed an all-time high leasing activity of 20.6 million sq ft, a 20% increase over the previous quarter. Bengaluru recorded 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 total leasing activity during Q4, highlighting large deal closures and expansion-led demand.


“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.

On the supply side, new completions across the top seven cities remained steady in 2025, with total additions reaching 56.5 million sq ft, up 5% over 2024. Supply was largely concentrated in select markets, with Bengaluru, Hyderabad and Pune each adding over 10 million sq ft during the year. Together, these three cities accounted for nearly 70% of total completions.

Quarterly supply moderated in Q4 2025 to 15.1 million sq ft, registering a 6% year-on-year decline. Five of the seven major cities reported lower supply on an annual basis during the quarter. However, Bengaluru and Hyderabad continued to see healthy completions, cumulatively accounting for over 75% of the quarterly supply. With demand consistently outpacing new supply in recent periods, overall vacancy levels declined by 49 basis points during the year, while rentals strengthened by up to 15% year-on-year across major cities.

From an occupier perspective, conventional office space uptake stood at 58.5 million sq ft in 2025, led primarily by technology firms. The sector alone leased nearly 22 million sq ft, registering a sharp 32% year-on-year growth. Demand, however, remained well diversified. BFSI, engineering & manufacturing, and consulting firms together accounted for around 25 million sq ft of conventional space uptake, contributing over 40% of total leasing and highlighting growing appetite for premium office assets across sectors.

Flex space demand also remained resilient, supported by hybrid work models, cost optimisation and speed-to-market requirements. Leading flex operators leased 13.0 million sq ft of Grade A space in 2025, marginally higher than in 2024, and accounted for nearly 18% of total office leasing. While Bengaluru and Delhi NCR led flex leasing, adoption was also strong in Pune and Chennai, where over 20% of annual leasing was driven by flex 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 continued to be a major growth engine, accounting for over 40% of total demand during 2025. GCCs have evolved well beyond traditional back-office roles, emerging as key hubs for research, product development, advanced analytics, AI, ML and cloud computing. Despite global uncertainties and trade frictions, GCCs leased close to 30 million sq ft of Grade A space during the year. Strong talent availability, policy support and cost advantages driven by recent rupee depreciation are expected to keep GCC demand robust, further strengthening India’s office market outlook in the coming years.