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):

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.

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.

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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