According to Vestian Research, GCCs emerged as the single largest growth engine for India’s office sector, accounting for 45% of total pan-India office absorption in 2025, up from 41% a year earlier. In absolute terms, GCC-led leasing touched 34.9 million sq ft, marking a robust 20% year-on-year increase.

This surge helped push total office absorption to a record 78.2 million sq ft, the highest ever recorded in a single calendar year. Overall absorption grew 11% year-on-year, underscoring the resilience of India’s commercial real estate market even as global macroeconomic and geopolitical challenges persisted.

GCC Momentum Lifts Overall Market Performance

Strong demand from GCCs—supported by a favourable policy environment, India’s deep talent pool, and continued restrictions around the H1-B visa—played a pivotal role in sustaining leasing activity across major cities. Developers responded swiftly, accelerating construction to meet demand.

As a result, new office completions rose 8% year-on-year to 55.5 million sq ft, also an all-time annual high. Importantly, demand continued to outpace supply.

Vacancy Rates Decline Sharply

With absorption significantly exceeding new supply, occupancy levels improved across the country. The pan-India vacancy rate fell by 310 basis points, declining from 13.9% in 2024 to 10.8% in 2025.

Vacancy corrections were visible across most major office markets, ranging from marginal improvements of 0.1% to sharp declines of nearly 6%. Pune was the sole exception, where vacancy levels increased by 4.6% due to substantial supply additions of nearly 12 million sq ft during the year.

City-wise Performance: Bengaluru Leads, NCR Surges

Bengaluru retained its position as India’s largest office market, recording 20.3 million sq ft of absorption, a 15% annual increase. Mumbai followed closely with 14.8 million sq ft, registering a strong 17% growth, despite a sharp drop in new completions.

One of the standout stories of 2025 was NCR, where office absorption jumped 34% year-on-year to 11.9 million sq ft. Even more striking was the surge in GCC activity—GCC absorption in NCR rose from just 1.6 million sq ft in 2024 to 5.3 million sq ft in 2025, increasing their share of city-wide leasing from 18% to 45%.

Sectoral Diversification Adds Depth

While the IT–ITeS sector continued to dominate, accounting for 38% of total office absorption, demand became increasingly diversified. BFSI and flex space operators each contributed 14%, reflecting broader occupier participation.

Notably, GCCs accounted for more than half of IT–ITeS leasing activity, contributing nearly 60% of the total area transacted by the sector in value terms. Beyond technology, growing demand from BFSI, healthcare, engineering, R&D, and flex operators added resilience to the market.

Outlook: GCC Share to Cross 50% by 2026

Office absorption in India has followed a steady upward trajectory—rising from 61 million sq ft in 2023, to 70 million sq ft in 2024, and nearly 80 million sq ft in 2025. At the current pace, Vestian expects absorption to reach 85–90 million sq ft by 2026.

Crucially, GCCs are expected to play an even bigger role. Their share of total absorption, which rose to 45% in 2025, is projected to exceed 50% by 2026, cementing India’s position as a global hub for capability centres.

As Vestian notes, sustained GCC demand, robust economic fundamentals, and a growing preference for Grade A and green-certified office spaces are likely to keep leasing momentum strong, even amid global uncertainty.

Also Read: Mumbai’s Office Market Shines as India’s Workspaces Expand Beyond Traditional Hubs

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Bengaluru and Delhi NCR emerged as key drivers of this growth, contributing nearly half of the total leasing activity. Chennai also showcased remarkable performance, with office space demand almost doubling to 2.9 million square feet, primarily driven by large transactions from technology firms.

Key Highlights of Q1 2025 Office Leasing:

• Conventional leasing dominates: Conventional workspaces accounted for 86% of the total Grade A office space demand, while flex spaces made up the remaining 14%.
• New supply steady: New office space supply remained stable at 9.9 million square feet, with Bengaluru, Delhi NCR, and Pune contributing nearly 90% of total completions.
• Vacancy rates drop: Strong demand momentum led to a 120-basis-point annual decline in vacancy levels, signaling a healthier market balance.
• Rental growth: Average office rentals surged 8% annually, driven by robust demand and limited new supply in key micro-markets.

City-Wise Leasing Trends (YoY Change)

Source: Colliers India

New Supply Trends

Despite strong leasing demand, new office supply remained stable at 9.9 million square feet. However, the distribution of new supply varied significantly across cities:

• Delhi NCR saw a staggering 440% YoY jump in new supply to 2.7 million square feet.
• Pune also recorded a 150% increase in new completions, reaching 2.5 million square feet.
• Hyderabad witnessed an 88% drop in new supply, with only 0.3 million square feet added.

Sector-Wise Leasing Trends

• Technology firms led demand, leasing 4.4 million square feet (28% share of total absorption).
• BFSI (Banking, Financial Services, and Insurance) and Engineering & Manufacturing sectors collectively accounted for 36% of the total office space uptake.
• Flex space leasing surged 22% YoY, reaching 2.2 million square feet, driven by enterprise-level managed office solutions.

Outlook for 2025

The Indian office leasing market is expected to maintain strong momentum throughout the year, driven by corporate expansions, infrastructure development, and favorable policy measures. With sustained demand, flex spaces are anticipated to gain further traction, potentially constituting 12-15% of occupiers’ portfolios in the coming years.

Arpit Mehrotra, Managing Director, Office Services, India, Colliers, stated, “2025 has started on a strong note, with leasing activity driven by corporate expansions and rising investments in commercial real estate. With policy support and continued demand from global capability centers (GCCs), we expect a strong growth trajectory in Tier I and select Tier II cities.”

As India cements its position as a key global business hub, the commercial real estate sector is poised for sustained growth in the months ahead.

Also Read: Century Real Estate

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Delhi-NCR showed strong demand, nearing 10 million sq ft of leasing activity, while Chennai and Pune recorded relatively subdued growth. Flex spaces emerged as a key driver, with annual absorption reaching an all-time high of 12.5 million sq ft, accounting for 19% of the total space uptake in 2024.

Record-breaking Quarter Boosts Annual Activity
The fourth quarter of 2024 saw the highest leasing activity of the year at 19.7 million sq ft, a 14% quarter-on-quarter growth. Bengaluru and Hyderabad were the top contributors, accounting for 54% of India’s total leasing during Q4. Bengaluru alone recorded 6.6 million sq ft of leasing in Q4, while Mumbai and Hyderabad witnessed the highest QoQ growth at 71% and 41%, respectively.

Arpit Mehrotra, Managing Director, Office Services, India, Colliers, said, “Grade A office space demand has broken all records, with leasing activity reaching 66.4 million sq ft in 2024. Bengaluru accounted for one-third of the total demand, while Hyderabad and Mumbai also achieved double-digit leasing for the first time.”

Sector-wise Performance
The technology sector continued to lead the demand, accounting for 24% of the total leasing activity with 16.3 million sq ft. Flex spaces saw the most significant growth, with a 45% YoY increase, contributing 12.5 million sq ft to the overall demand. BFSI and engineering sectors also showed robust performance, with both crossing the 10 million sq ft mark.

New Supply Keeps Pace
India’s office market added 53.3 million sq ft of new supply in 2024, a 6% increase from the previous year. Bengaluru and Hyderabad accounted for 54% of the new completions, with Mumbai recording an impressive 655% annual growth in new supply. Despite the significant supply, vacancy levels dipped by 80 basis points, while rentals increased by 5%.

Vimal Nadar, Senior Director and Head of Research, Colliers India, noted, “Flex operators accounted for 20% of the total office space demand in 2024, a significant jump from previous years. This trend is likely to expand into Tier-II and Tier-III cities in 2025, driving further growth.”

Looking Ahead
With demand exceeding supply in key markets and a sustained interest in Grade A office spaces, India’s office leasing activity is expected to stabilize at elevated levels. Annual leasing exceeding 60 million sq ft is projected to become the new norm in the coming years.

Also Read: Record-Breaking Real Estate IPOs in 2024: INR 135 Billion Raised

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The growth is driven by increased activity in sectors such as IT-BPM, BFSI, engineering and manufacturing, along with the rising influence of Global Capability Centres (GCCs). Fresh leasing is projected to account for nearly 70% of the total gross leasing volume in 2024, highlighting growing business confidence and expansion by both global and domestic players.

“The robust momentum in India’s office real estate leasing reflects the strength and resilience of the country’s business ecosystem. With increased activity in sectors like IT-BPM, BFSI, and manufacturing, we are observing sustained demand for high-quality office spaces, particularly in prime micro-markets. This not only underscores the confidence of global and domestic players in India but also indicates a long-term positive outlook for commercial real estate, driven by infrastructure developments and new supply pipelines,” said Navin Makhija, Managing Director at The Wadhwa Group.

The period from January to September 2024 alone has seen 66.7 million square feet of office leasing, signaling strong year-end numbers. This upward trend also aligns with occupiers’ growing preference for Grade A, well-located office spaces with modern amenities.

“The office real estate sector’s expected milestone of 85 million square feet this year highlights the buoyant market sentiment and increasing business activity. As occupiers prioritize top-grade, well-located office spaces equipped with modern amenities, we are seeing heightened interest from both global entities and domestic businesses,” said Shraddha Kedia-Agarwal, Director at Transcon Developers.

Key micro-markets are experiencing moderate upward pressure on rents due to this demand, particularly in prime business hubs. While consistent supply influx helps maintain a tenant-favorable sentiment, rents are expected to rise steadily in 2025.

“The record gross leasing projections for 2024 are a testament to the steady growth and recovery of India’s office real estate sector post-pandemic. The rising contribution of GCCs and domestic firms expanding their operations showcases the vibrancy of our economy and the evolving workspace dynamics,” said Abhishek Jain, COO of Satellite Developers Private Limited (SDPL).

Cushman & Wakefield’s report predicts that GCCs will account for nearly 30% of the total gross leasing volume, further solidifying their role as a key driver of demand. Tenant representation experts highlight that India’s office sector is not only recovering but transforming to meet the evolving dynamics of workspace requirements, driven by technology, flexibility, and sustainability.

The future outlook for India’s commercial real estate remains optimistic, with prime micro-markets continuing to attract both occupiers and investors. As the sector moves towards a record-breaking year, the steady growth of office leasing reflects the resilience and long-term potential of India’s real estate landscape.

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·       Average deal size up 30% YoY

·       Delhi-NCR leads demand with a 28% share

·       Third-party logistics players account for 50% of the absorption

Activity in Grade A industrial and warehousing facilities continues to be robust during Q1 2022 with gross absorption in the top 5 cities at 6.2 mn sq feet, an 11% increase from Q1 2021. The demand was led by heightened leasing in Delhi-NCR and Mumbai. Vacancy across Grade A projects also declined during the quarter, indicating a healthy demand environment in the sector. Overall, the demand was steered by robust warehousing demand from third-party logistics players, amidst strong consumer demand across sectors.

About 50% of the gross absorption was led by third-party logistics players, followed by the Engineering and Automobile sectors with a share of 17% and 12% respectively.

Trends in Grade A Gross absorption

Trends in Grade A Supply

“Demand for Grade A spaces remained robust with healthy take-up witnessed this quarter across key cities with NCR market leading the space take-up. Growing concerns about rising construction costs has exerted upward pressure on rents quoted for upcoming developments across markets. Developers are now looking to cater to build-to-suit demand keenly as opposed to speculative supply addition traditionally due to this increased input cost scenario. The trend is expected to continue in the next few quarters as Logistics and E-commerce players take up larger spaces in top cities as they scale up their operations in Tier-I cities”, said Shyam Arumugam, Managing Director, Industrial and Logistics Services, Colliers India.

Overall, grade A supply declined 16% YoY across the top five cities to about 6.4 million sq feet. Lower supply and robust leasing during the quarter led to a drop in vacancy. Grade A vacancy levels declined to 9.8% at the end of Q1 2022, from 11.8% in Q4 2021. This was largely led by strong leasing activity in Delhi-NCR, Mumbai and Pune.

Delhi-NCR dominated leasing activity with a share of 28%. The demand was led by large deals that accounted for about 91% of the total leasing. Deals by third-party logistics players led most of the activity through large deals. The majority of the activity was in the Luhari location. Pune accounted for 26% of the leasing. The automobile sector continued to lead the demand with a notable share of 43% in total leasing of the city, followed by Engineering at 20% share.

Large deals account for 80% of the leasing

Deals above 100,000 sq feet accounted for 80% of the total leasing. This was led by larger deals by third-party logistics players and e-commerce companies.

“We are seeing larger warehousing deals which has pushed up the average deal size by 30% to about 1.1 lakh sq feet. This shows that occupiers and third-party logistics players especially are increasingly taking up larger integrated warehousing space led by higher demand and shorter delivery timelines,” says Vimal Nadar, Head and Senior Director, Research, Colliers India. 

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