Return-to-office push, business growth to drive India’s office demand

A shift in workplace strategies, driven by return-to-office policies and business growth, is expected to shape India’s office market over the next two years as companies are revisiting their space requirements, with a clear tilt towards larger portfolios and flexible workplace models.

Over 85% of domestic firms plan to expand their office portfolios in the next two years, compared with 73% in 2024. Around 94% of companies want employees to work from the office at least three days a week, while 52% of firms have mandated full return-to-office, up from 36% in 2024, showed CBRE South Asia’s survey of Indian office occupiers.

“India’s office market is entering a defining decade, marked by both resilience and reinvention. As occupiers demand future-ready, high-performance workspaces, the industry must respond with strategic upgrades, sustainability-driven retrofits, and digitally integrated ecosystems,” said Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE.

According to him, the next wave of growth will not only reinforce India’s position as a global office hub but also unlock long-term value across the real estate lifecycle.

“Global capability centres and flexible workspace operators are shaping the next chapter of India’s office sector. GCCs alone account for about 35-40% of absorption, driven by their rapid evolution into high-value innovation hubs across AI, engineering, and life sciences. At the same time, flexible workspaces are no longer a secondary option; they are becoming integral to occupier strategies, with adoption levels set to double in the coming years,” said Ram Chandnani, MD - Leasing, CBRE India

Global capability centres (GCCs) have contributed 35-40% of annual office absorption in recent years. About 65% of GCCs intend to expand in the next two years, led by banking and financial services, life sciences, and engineering and manufacturing sectors.

Average GCC deal size rose to about 108,000 sq ft in the first half of 2025, from 91,000 sq ft in 2024. Nearly 75% of GCCs have already set ESG targets for their portfolios, a trend expected to deepen with the Business Responsibility and Sustainability Reporting (BRSR) framework.

Flexible workspace operators, who account for more than 15% of annual leasing activity, are expected to see rising adoption. The share of companies allocating 26–50% of their portfolio to flexible spaces is projected to more than double over the next two years.

Chandnani is of the view that these forces will redefine workplace models, creating a more dynamic, innovative, and responsible office ecosystem for the future.

The office leasing activity by domestic firms in 2023-24 was 86% higher than in the pre-COVID period of 2018-19, underscoring the strong rebound in demand and growing preference for larger, flexible workspaces.

Among smaller occupiers, 58% plan to place more than 10% of their portfolio in flexible workspaces. Among larger occupiers, the share is projected to rise to 52% by 2027, from 33% at present.

The survey also pointed to occupiers considering expansion in smaller cities, driven by talent availability, cost advantages, and improving infrastructure.