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 citiesBengaluru, 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):

CityGross Leasing 2024 (mn sq ft)Gross Leasing 2025F (mn sq ft)New Supply 2024 (mn sq ft)New Supply 2025F (mn sq ft)
Bengaluru21.720+15.215 – 20
Chennai6.85 – 102.15 – 10
Delhi NCR9.710 – 158.710 – 15
Hyderabad12.510 – 1513.710 – 15
Mumbai10.05 – 108.35 – 10
Pune5.75 – 105.35 – 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.

SectorLeasing 2024 (mn sq ft)Share (%)Leasing 2025F (mn sq ft)Share (%)
Technology16.325%15.0 – 20.0~25%
Flex Spaces12.519%~15.0~20%
BFSI11.017%10.0 – 15.015% – 20%
Engineering & Manufacturing10.416%10.0 – 15.015% – 20%
Healthcare4.87%3.0 – 8.05% – 10%
Consulting4.36%3.0 – 8.05% – 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.

YearLeasing (mn sq ft)Share (%)
202425.739%
2025F25.0-30.0~40%

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.

Also Read: Gurgaon office leasing

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