Vacancy levels have fallen to their lowest in three years — down from 16.7% to 16.2%, despite a steady stream of new office completions.

Rents Rise, Vacancies Fall

• Average office rent: ₹90 per sq. ft. (up from ₹85 last year)
• Vacancy levels: 16.2% in 9M 2025 (down from 16.7%)
• City with least vacancy: Chennai (8.9%)
• Highest rent growth: Bengaluru (9% year-on-year increase)

The data signals that India’s post-pandemic office recovery is firmly underway, powered by expanding global capability centers (GCCs), coworking spaces, and BFSI demand.

Pune and Bengaluru Dominate Absorption

Net office space absorption across the top 7 cities reached a record 42 million sq. ft. — up 34% from 31 million sq. ft. in the same period last year.

• Pune led the charge with a massive 97% rise in absorption, growing from 3.1 to 6.2 million sq. ft.
• Bengaluru topped in total leasing with 9.95 million sq. ft., followed by Delhi-NCR (8.2 million sq. ft.) and Mumbai Metropolitan Region (6.6 million sq. ft.)
• Kolkata was the only city to see a dip of 19% in leasing activity.

“GCCs alone accounted for 40% of total office leasing in India,” said Anuj Puri, Chairman of ANAROCK Group. “Bengaluru, Pune, and Chennai remain the preferred destinations for such occupiers.”

New Supply Surges — Led by Pune and NCR

Developers responded to the demand with a 15% jump in new office completions — from 34 million sq. ft. in 9M 2024 to 39.2 million sq. ft. this year.

• Pune again topped with a 168% rise in new office completions.
• Delhi-NCR saw 80% growth, followed by Chennai (28%) and Bengaluru (20%).
• In contrast, Hyderabad (-39%) and Mumbai (-41%) saw a slowdown in new completions, as developers focused on leasing existing inventory.

Who’s Leasing All This Space?

The sector-wise split reveals that the office market’s backbone remains strong:

• IT/ITeS sector: 27% of total leasing (slightly lower than last year)
• Coworking spaces: 23% (up from 21%)
• BFSI: 18%

Coworking and hybrid work models have continued to shape demand. Many companies are opting for flexible, green-certified, amenity-rich spaces, which are now a major focus for developers.

What This Means for Businesses

For occupiers, the data indicates rising rents but improving availability of premium Grade A offices with modern infrastructure.
For developers, it’s a sign that the commercial segment is rebounding faster than expected.
For employees and cities, it means more job hubs, revived CBDs, and higher business confidence.

Even with global headwinds, India’s office market is back in growth mode — signaling strong investor faith in the country’s long-term corporate fundamentals.

Also Read: Occupiers across major markets in India willing to pay higher rentals for quality office supply

The post India’s Office Rentals Rise 6% as Companies Rush to Expand – Pune and Bengaluru Lead, Vacancy at 3-Year Low appeared first on Square Feat India.

The move comes amid the rapid expansion of India’s co-working sector, which is currently valued at $1.94 billion and is expected to grow at a CAGR of 7.4%, reaching $3 billion by 2030. Increasing demand from SMEs, startups, and larger corporations is driving this growth, with Mumbai emerging as a key hub alongside NCR and Bangalore.

Nirav Jagad, Chief People Officer of SUGAR Cosmetics, stated that the decision to lease the space for five years aligns with the company’s strategic expansion. The 9,000 sq. ft. usable workspace will be tailored to their specifications, particularly in terms of technology infrastructure. Jagad highlighted the location’s accessibility for employees and visitors as a key factor in the selection process.

Enzyme Office Spaces, which specializes in managed office solutions, confirmed the agreement. Founder & CEO Ashish Agarwal stated that the partnership underscores the company’s growing presence in the co-working and managed office market. He emphasized Enzyme’s commitment to providing a high-quality experience for its corporate clientele.

The deal highlights the increasing preference for flexible, cost-effective office solutions in Mumbai’s evolving commercial real estate landscape.

Also Read: Flat Sold For Rs 1.25 lakh per square feet in Carmicahel Road

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Unprecedented Growth in Flexible Workspaces

Flexible workspaces, which include business centers, co-working spaces, and managed offices, now account for 14% of India’s total office leasing activity (89 MSF). Bengaluru led the market with 3.4 MSF of leasing volume, almost doubling its 2023 figures. Meanwhile, Mumbai recorded a 3x YoY increase, reaching 1.9 MSF, underscoring the growing appeal of flexible workspaces in India’s financial capital. Delhi NCR, Hyderabad, and Pune also emerged as key hubs, with leasing volumes of 2.3 MSF, 1.6 MSF, and 1.6 MSF, respectively.

Corporate Demand Fuels Surge in Flex Seat Leasing

In addition to office space leasing by operators, companies leased approximately 2.2 lakh seats from flexible workspace operators in 2024, a 44% jump from 2023’s 1.56 lakh seats. Bengaluru led the segment, accounting for 29% (~64,000 seats) of total flex seat leasing, followed by Pune (39,000 seats), Delhi NCR (38,000 seats), and Mumbai (28,000 seats).

The IT-BPM sector dominated flex seat leasing with a 48% share, followed by engineering and manufacturing (17%), BFSI (10%), and professional services (6%), indicating a diverse occupier mix across industries.

Key Drivers Behind the Demand

The significant growth in the flexible workspace sector can be attributed to:

• Evolving Business Needs: Companies are prioritizing operational flexibility and cost efficiency amid changing work dynamics.
• Hybrid Work Models: A shift toward hybrid setups has increased the need for managed office solutions.
• Expansion of Global Capability Centers (GCCs): New entrants and expanding companies are driving demand for premium flexible office spaces.
• Core+Flex Strategy Adoption: Large enterprises are increasingly combining traditional offices with managed workspaces to optimize costs and operations.

Industry Experts Weigh In

Commenting on the sector’s rapid expansion, Ramita Arora, Managing Director – Bengaluru & Head – Flex, India, Cushman & Wakefield, said:

“With new companies entering India and existing firms prioritizing flexibility and cost-effective solutions, the demand for managed office spaces continues to surge. Flexible workspaces now account for 14% of India’s total office leasing, firmly establishing them as a mainstream real estate solution.”

She further noted that Grade A and A+ assets will continue to see strong demand from leading managed space operators, with enterprises prioritizing best-in-class amenities, sustainability, and technology integration.

Outlook for 2025 and Beyond

The flexible workspace sector is expected to maintain strong growth in 2025, with global enterprises expanding their Core+Flex strategies. As demand for premium managed spaces rises, operators are focusing on customization, end-to-end services, and sustainability-driven solutions to cater to evolving corporate needs.

With a record-breaking 2024 and strong momentum heading into 2025, India’s flexible workspace sector is set to play a crucial role in shaping the future of office real estate.

Also Read: ANAROCK Acquires Flexible Workspaces Platform myHQ

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Strategic Location and Seamless Execution

Following a comprehensive market analysis, One International Center was identified as the ideal location, offering a Grade A commercial space in a well-connected micro-market. The Office Services team at Colliers leveraged its expertise in real estate negotiations to secure the space at highly favorable terms, aligning with Protean’s business objectives.

Colliers’ approach extends beyond just transactions, ensuring that workplace design is strategically planned from the outset. By integrating cost-effective solutions with long-term business value, the firm is set to optimize the new office space for enhanced functionality and innovation. Recognizing Colliers’ strong track record in workplace strategy, Protean eGov Technologies has also engaged Colliers’ design services team to lead the project.

Leadership Insights

Dipali Sheth, Chief Human Resources Officer at Protean eGov Technologies Ltd., emphasized the importance of a collaborative and inspiring workspace:

“A workplace isn’t just about desks and walls—it’s about people coming together to solve big challenges, share ideas, and create meaningful change. At Protean eGov Technologies, we believe in building spaces that empower our teams to think boldly, collaborate deeply, and drive digital transformation. Partnering with Colliers India for this new office is an important step in shaping an environment where innovation thrives, and our people can do their best work. We look forward to creating a space that reflects our mission, fuels our impact, and supports the future of digital governance in India.”

Arpit Mehrotra, Managing Director, Office Services, Colliers India, highlighted Colliers’ commitment to delivering tailored real estate solutions:

“We have always been focused on being a holistic real estate partner to our clients, carefully understanding every facet of their business needs. We pride ourselves on being a one-stop establishment that addresses real estate needs, however diversified, complex, or niche. A lot of our success is attributed to the internal partnerships we nurture. Our experts have the strategic ability to identify client needs and align them with the right business vertical. This transaction is a prime example of the seamless collaboration we foster at Colliers. I am proud of the value we have created for Protean eGov Technologies Ltd. and look forward to strengthening this partnership in the future.”

Future-Ready Workplace

This transaction underscores Colliers India’s ability to craft strategic, high-value real estate solutions tailored to client needs. With a focus on delivering functional and future-ready workplaces, Colliers is set to help Protean eGov Technologies create an inspiring workspace that enhances productivity, collaboration, and long-term growth.

Source: Colliers India

Also Read: Office absorption to touch a new high in 2022

The post Colliers India Facilitates 68,021 Sq. Ft. Office Deal for Protean eGov Technologies in Mumbai appeared first on Square Feat India.

Lease Details

Both office spaces are located in the First International Financial Center (FIFC), a 1.99-acre commercial complex in Bandra East. BKC, known as Mumbai’s central business district (CBD), is home to leading banks, financial institutions, and corporate headquarters, making it a preferred destination for global corporations.

Google India Private Limited Lease Renewal

• Location: First International Financial Center (FIFC), Bandra East
• Chargeable Area: 1,10,980 sq. ft. (~10,310 sq. m) across two floors
• Monthly Rent: ₹3.55 crore
• Rent Per Sq. Ft.: ₹320 per month
• Lease Term: Five years, starting June 2025
• Rent Escalation: 15% increase after 36 months
• Security Deposit: ₹9.64 crore
• Stamp Duty Paid: ₹1.87 crore
• Registration Charges: ₹30,000

Google Cloud India Private Limited Lease Renewal

• Location: First International Financial Center (FIFC), Bandra East
• Chargeable Area: 38,678 sq. ft. (~3,593 sq. m) across one floor
• Monthly Rent: ₹1.24 crore
• Rent Per Sq. Ft.: ₹320 per month
• Lease Term: Five years, starting June 2025
• Rent Escalation: 15% increase after 36 months
• Security Deposit: ₹3.13 crore
• Stamp Duty Paid: ₹66.92 lakh
• Registration Charges: ₹30,000

BKC: A Prime Commercial Destination

BKC continues to be Mumbai’s most sought-after commercial district, attracting Fortune 500 companies, BFSI giants, and global tech firms. Its strategic location offers seamless connectivity via:

• Western Express Highway
• Bandra-Worli Sea Link
• Mumbai International Airport
• Upcoming metro expansion

With Google’s lease renewal, FIFC in BKC remains a key office space for global technology firms, reinforcing the district’s reputation as a preferred business destination in India.

Also Read: Google’s Raiden Infotech leases property in Navi Mumbai For $10.8 Lac Monthly rent

The post Google India and Google Cloud Renew Office Leases in Mumbai’s BKC at a Combined ₹4.79 Crore Per Month appeared first on Square Feat India.