India’s office real estate market ended 2025 on a strong note, with Grade A office leasing crossing the 70 million sq ft mark for the first time, signalling sustained confidence among corporates despite global uncertainties. According to Colliers India, total office leasing touched 71.5 million sq ft, registering a 6% year-on-year growth across the top seven cities.
A sharp year-end surge, strong demand from technology firms and Global Capability Centers (GCCs), and a growing preference for high-quality offices drove this record-breaking performance.
Strong Year-End Push Seals the Record
The final quarter of 2025 proved decisive for India’s office market.
- Q4 leasing hit an all-time high of 20.6 million sq ft,
- marking a 20% jump over the previous quarter.
Bengaluru alone recorded its highest-ever quarterly leasing at 8.1 million sq ft, while Delhi-NCR followed with 4.2 million sq ft. Together, the two cities contributed nearly 60% of India’s total office leasing in Q4, highlighting large deal closures and expansion by major occupiers.
Bengaluru Leads, But Demand Is Broad-Based
While Bengaluru remained India’s largest office market, demand was well distributed across cities:
- Bengaluru: 22.1 million sq ft (nearly one-third of national demand)
- Delhi-NCR, Hyderabad, Chennai & Mumbai: each clocked 10–11 million sq ft
- Pune and Kolkata: also recorded healthy annual growth
This multi-city demand reflects how companies are expanding operations across locations, rather than relying on a single metro.
Technology Firms Power Office Demand
Technology companies remained the biggest drivers of office leasing in 2025.
- Tech firms leased nearly 22 million sq ft of conventional office space
- This marked a 32% YoY increase
- Overall, technology accounted for 37% of total conventional office leasing
Beyond tech, demand was diversified:
- BFSI
- Engineering & Manufacturing
- Consulting
Together, these sectors leased nearly 25 million sq ft, underscoring the broad-based recovery of office demand.
Flex Offices Continue to Gain Ground
Flexible workspaces continued their steady rise in 2025:
- 13 million sq ft leased by flex operators
- 18% share of total office leasing
- Strong adoption in Bengaluru and Delhi-NCR, with notable traction in Pune and Chennai
Hybrid work models, faster market entry, and cost optimisation are driving companies toward flexible and managed office solutions.
GCCs Emerge as a Major Growth Engine
Global Capability Centers (GCCs) played a defining role in India’s office market this year.
- GCCs leased close to 30 million sq ft in 2025
- Accounted for over 40% of total office demand
These centres are no longer limited to back-office work and are now driving advanced functions like AI, cloud computing, analytics, and product development, reinforcing India’s position as a global innovation hub.
Supply Stays Steady, Vacancies Fall
New office supply remained balanced with demand:
- 56.5 million sq ft of new Grade A supply added in 2025
- A 5% YoY increase
- Bengaluru, Hyderabad and Pune together contributed nearly 70% of new completions
With demand outpacing supply:
- Vacancy levels fell by 49 basis points
- Average office rentals increased by up to 15% YoY across major cities
This indicates a clear flight to quality, with occupiers preferring premium and sustainable buildings.
What Lies Ahead for 2026
Industry experts remain optimistic about the outlook for 2026.
According to Colliers:
- Demand from GCCs, technology firms, BFSI, and flex operators will remain strong
- Sustainable and Grade A offices will see higher traction
- Flex spaces could contribute nearly 20% of office demand going forward
With economic growth, talent availability, and corporate expansion working in tandem, India’s office market appears well-positioned for another robust year.
