India’s office absorption hits 18.79 Mn sq ft in Q2 2025; Southern cities lead as flex spaces grow rapidly
India’s office real estate market continues its upward trajectory in Q2 2025, clocking a robust 18.79 million sq. ft. of gross absorption — a 10% YoY and 5% QoQ rise — according to Vestian Research.
The IT-ITeS sector emerged as the top performer, absorbing 9.4 Mn sq. ft., or 50% of total leasing activity, followed by flex spaces, which saw an impressive 68% growth over the previous quarter, absorbing 2.63 Mn sq. ft. and accounting for 14% of pan-India office absorption.
🧾 Sector-Wise Absorption – Q2 2025
| Sector | Q2 2025 (Mn sq ft) | Q1 2025 (Mn sq ft) | Q2 2024 (Mn sq ft) | Share Q2 2025 |
|---|---|---|---|---|
| IT-ITeS | 9.4 | 6.5 | 7.5 | 50% |
| Flex Spaces | 2.63 | 1.6 | 1.3 | 14% |
| BFSI | 1.1 | 3.7 | 2.1 | 6% |
| Others* | 5.6 | 6.2 | 6.1 | 30% |
Others include Aviation, Consulting, Engineering, Retail, Healthcare, Infra, Logistics, Telecom, FMCG, etc.
📍 Key Southern Cities Dominate
Bengaluru, Hyderabad, and Chennai contributed nearly 80% of the flex space absorption across the top 7 cities — signaling the growing preference for hybrid and agile workspaces in tech-dominated hubs.
🗣️ “India’s office market continued to grow in Q2 2025, largely driven by robust absorption in Bengaluru, Hyderabad, and Mumbai. With enterprises returning to office and Grade-A completions due in H2 2025, we expect this growth to sustain.”
— Mr. Shrinivas Rao, CEO, Vestian
📈 City-wise Office Market Performance – Q2 2025
| City | Absorption (Mn sq ft) | Y-o-Y Change | Q-o-Q Change | New Supply (Mn sq ft) | Y-o-Y Change | Q-o-Q Change |
|---|---|---|---|---|---|---|
| Bengaluru | 5.62 | +32% | +38% | 3.90 | +11% | +11% |
| Chennai | 1.82 | +4% | +13% | 1.50 | +114% | +1400% |
| Hyderabad | 3.56 | +5% | +34% | 2.70 | -7% | N/A |
| Mumbai | 3.45 | +2% | -14% | 1.10 | -67% | +267% |
| Kolkata | 0.35 | +52% | +52% | 0.00 | N/A | N/A |
| Pune | 1.37 | -52% | -49% | 4.30 | +760% | +48% |
| NCR (Delhi) | 2.62 | +130% | -4% | 1.20 | -20% | -54% |
Total India Q2 2025 Absorption: 18.79 Mn sq. ft.
Total New Supply: 14.7 Mn sq. ft.
🧭 Highlights & Insights
🔹 Flex Spaces on the Rise
- Grew 68% QoQ, now 14% share in Q2 vs. 9% in Q1
- Southern cities = 80% of flex space leasing
- Preferred by startups, SMEs, and hybrid-model enterprises
🔹 IT-ITeS Still the Backbone
- 50% share of leasing
- Strongholds: Yeshwantpur (Bengaluru), Nanakramguda (Hyderabad), Airoli (Mumbai)
🔹 Regional Momentum
- South India share in total absorption surged to 59% in Q2 2025, up from 46% in Q1
🧠 City Snapshots
- Bengaluru: Bounced back after two weak quarters; highest absorption among all cities
- Chennai: Absorption grew 13% QoQ, aided by massive supply influx
- Hyderabad: Strong quarterly jump of 34%
- Mumbai: Absorption dropped 14% QoQ, despite YoY growth
- Kolkata: Highest absorption in 2 years
- Pune: Sharp drop in leasing but strong new supply
- NCR: Mixed trend – YoY surge but marginal QoQ dip
📌 Market Summary Box
India Office Market – Q2 2025:
Full Year Projection: Likely to cross 75 Mn sq. ft. – highest ever
Gross Absorption: 18.79 Mn sq. ft.
YoY Growth: 10%
QoQ Growth: 5%
Flex Space Growth (QoQ): +68%
Top Sectors: IT-ITeS (50%), Flex (14%)
Top Cities: Bengaluru, Hyderabad, Mumbai
Total H1 2025 Absorption: 36.75 Mn sq. ft. (+21% YoY)
Also Read: Reality Hits Realty Sector Hard
