India’s office real estate market is set to witness steady growth in 2025, with gross leasing activity projected to reach 65-70 million sq ft across the country’s top six cities, according to a report by Colliers India. The engineering & manufacturing, BFSI, and flex space sectors are expected to be the key demand drivers, growing 10-15% year-on-year.
Colliers’ report, India Office: Setting New Standards for 2025, was released at the FICCI 18th Real Estate Summit and highlights the evolution of India’s commercial real estate from a supply-driven to an occupier-led market. Developers are now focusing on sustainability, energy efficiency, and flexible office spaces to meet evolving tenant needs.
Office Leasing Trends in 2025
India’s top six cities—Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune—are expected to drive leasing growth, with Bengaluru leading the market at over 20 million sq ft, followed by Hyderabad and Delhi-NCR at 10-15 million sq ft each.
Projected Office Leasing and Supply in 2025 (Top Cities):
| City | Gross Leasing 2024 (mn sq ft) | Gross Leasing 2025F (mn sq ft) | New Supply 2024 (mn sq ft) | New Supply 2025F (mn sq ft) |
|---|---|---|---|---|
| Bengaluru | 21.7 | 20+ | 15.2 | 15 – 20 |
| Chennai | 6.8 | 5 – 10 | 2.1 | 5 – 10 |
| Delhi NCR | 9.7 | 10 – 15 | 8.7 | 10 – 15 |
| Hyderabad | 12.5 | 10 – 15 | 13.7 | 10 – 15 |
| Mumbai | 10.0 | 5 – 10 | 8.3 | 5 – 10 |
| Pune | 5.7 | 5 – 10 | 5.3 | 5 – 10 |
Source: Colliers
New office supply is estimated at 60-65 million sq ft, driven primarily by Bengaluru, Hyderabad, and Delhi-NCR. Vacancy rates across top cities are expected to decline to 15-16% as demand increases.
Sector-Wise Demand: Engineering, BFSI, and Flex Spaces to Lead
The biggest leasing growth is expected in the engineering & manufacturing, BFSI, and flex space sectors, which are projected to account for nearly half of all office leasing in 2025.
| Sector | Leasing 2024 (mn sq ft) | Share (%) | Leasing 2025F (mn sq ft) | Share (%) |
|---|---|---|---|---|
| Technology | 16.3 | 25% | 15.0 – 20.0 | ~25% |
| Flex Spaces | 12.5 | 19% | ~15.0 | ~20% |
| BFSI | 11.0 | 17% | 10.0 – 15.0 | 15% – 20% |
| Engineering & Manufacturing | 10.4 | 16% | 10.0 – 15.0 | 15% – 20% |
| Healthcare | 4.8 | 7% | 3.0 – 8.0 | 5% – 10% |
| Consulting | 4.3 | 6% | 3.0 – 8.0 | 5% – 10% |
Source: Colliers
Bengaluru will see the highest demand from engineering and manufacturing firms, while Mumbai remains a hub for BFSI. Additionally, flex spaces are set to grow significantly, accounting for nearly 20% of total leasing activity in 2025.
Global Capability Centers (GCCs) to Play a Bigger Role
GCCs, which saw 41% growth in 2024, are expected to contribute 25-30 million sq ft in leasing activity in 2025. The top markets for GCCs will continue to be Bengaluru and Hyderabad, with a 70% contribution from US-based companies.
| Year | Leasing (mn sq ft) | Share (%) |
|---|---|---|
| 2024 | 25.7 | 39% |
| 2025F | 25.0-30.0 | ~40% |
Source: Colliers
Sustainability and REIT Growth to Shape Future Developments
With India’s REIT market gaining traction, developers are focusing on high-quality, sustainable real estate to attract investors and tenants. The adoption of green-certified buildings and energy-efficient designs is expected to accelerate India’s transition to a net-zero carbon economy.
Vimal Nadar, Senior Director & Head of Research, Colliers India, stated:
“India’s commercial real estate is shifting towards high-quality, rent-yielding assets, with developers increasingly prioritizing green-certified buildings. In 2025, an estimated 80-85% of office demand will be concentrated in green-certified developments.”
Shift Towards Sustainability
India’s office real estate sector is set for another strong year in 2025, driven by rising occupier demand, expansion of GCCs, and a shift toward sustainability. With leasing activity expected to remain robust at 65-70 million sq ft, Bengaluru, Hyderabad, and Delhi-NCR will lead the market, while sectors like engineering, BFSI, and flex spaces will drive demand.
As businesses continue expanding and evolving, developers must adapt to an occupier-driven market, ensuring high-quality, flexible, and sustainable office spaces that align with changing workforce needs.
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