The findings, released at a leadership meet in Bengaluru, come from JLL’s India’s AI Revolution in Corporate Real Estate report based on its Global Real Estate Technology Survey 2025. The data shows the sector is at a decisive turning point—racing to adopt AI for cost optimization and space efficiency, yet struggling to convert experiments into measurable business value.

Adoption Exploded, Outcomes Didn’t

AI use in corporate real estate (CRE) has jumped from under 5% in 2023 to 91% in 2025, an 18-fold rise in just two years. However, execution gaps remain severe:

• 56% of organizations achieved only 2–3 AI objectives
• 26% achieved none at scale
• Only 5% achieved 4–5 objectives successfully

This reveals a widening divide between companies experimenting with AI and those actually benefiting from it.

Broken Tech Foundations Are the Real Problem

The biggest obstacle isn’t lack of interest—it’s outdated infrastructure.

• 88% of firms say at least three existing tech systems are failing
• 57% lack a clear AI strategy
• 29% cite talent shortages in technology leadership

Legacy systems are preventing clean data integration, which is essential for AI performance. As a result, many companies are attempting advanced automation on disconnected digital ecosystems.

Cost Pressure Is Driving Boardroom Urgency

Corporate leaders are pushing workplace teams to deliver real results fast:

• 93% of executives say reducing real estate costs is a top strategic priority
• 93% plan to invest in system upgrades
• 58% classify upgrades as a strategic imperative

The report predicts that by 2030, about 33% of workplace real estate heads will report directly to CTOs, up from 16% today—signalling a structural shift where office portfolios are managed like technology platforms rather than static assets.

Where Companies Are Using AI Most

Indian firms are focusing on high-impact use cases instead of small automation wins:

1. Portfolio optimization – 59%
   AI helps right-size office space, reduce lease waste, and cut costs.
2. Energy management – 54%
   Used to lower utility bills and improve sustainability metrics.
3. Real estate data workflows – 49%
   Fixing messy datasets for faster executive decision-making.

What Separates Winners From Strugglers

According to the report, companies that successfully scale AI consistently follow three steps:

• Audit existing tools and data before rollout
• Define measurable success metrics upfront
• Build cross-functional teams across IT, HR, finance, and workplace operations

Firms that skip these fundamentals tend to remain stuck in pilot mode.

Industry Takeaway

India’s corporate real estate sector isn’t lacking ambition—it’s facing an execution challenge. AI adoption is nearly universal, but real transformation will depend on fixing data systems, upgrading infrastructure, and aligning strategy with measurable outcomes.

In short: the AI race has begun, but only a handful are actually winning.

Also Read: A massive construction boom for data centers—the ‘digital warehouses’ that power our online world—is underway, fueled by the explosive growth of Artificial Intelligence. A recent report reveals a staggering $180 billion is being poured into these facilities across Asia. Mumbai is at the heart of this transformation, with huge new AI-ready campuses and a major push for green energy.

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Q2 2025 Snapshot: 17.8 Million Sq. Ft. Leased

India’s office market clocked 17.8 million sq. ft. of gross leasing in Q2 2025, reflecting an 11% YoY growth. Bengaluru led the charge with a 27% share, followed by Hyderabad, Mumbai, and Chennai, each leasing over 2.5 million sq. ft.

Leasing Performance in Top 7 Cities (Grade A Leasing)

“The robust performance in H1 2025 reflects sustained occupier confidence and strong market fundamentals,” says Arpit Mehrotra, Managing Director, Office Services, Colliers India.

New Supply Grows: 14.9 Million Sq. Ft. Added in Q2

Grade A new supply reached 14.9 million sq. ft. in Q2 2025, a solid 11% YoY increase. Bengaluru, Hyderabad, and Pune collectively accounted for over 70% of completions in the first half.

New Grade A Supply Trends

Who’s Leasing? Tech & Flex Players Drive Demand

Sector-Wise Leasing Share (Q2 2025):

• Technology firms: 47% of conventional leasing
• BFSI: 19%
• Flex spaces: 24% of total demand

“Flex spaces are no longer secondary. With 4.3 million sq. ft. leased this quarter, they’re shaping workplace trends,” says Vimal Nadar, Head of Research, Colliers India.

Conventional vs Flex Space Leasing

Top Office Deals in Q2 2025

Major Conventional Leasing Deals

Key Flex Operator Deals

Outlook: On Track to Cross 65 Million Sq. Ft. in 2025

With H1 2025 already clocking 33.7 million sq. ft., Colliers projects total leasing to reach or exceed 65–70 million sq. ft. by year-end. This would mark another milestone for India’s commercial real estate sector.

Vacancy levels remained stable at 16.2%, despite significant supply additions. Rentals too stayed largely range-bound, keeping India competitive for global firms.

“India’s commercial real estate is evolving fast, and 2025 could be a record-breaking year,” adds Mehrotra.

Bottom Line: With tech, flex, and BFSI leading the charge, and cities like Bengaluru, Hyderabad, and Pune surging ahead in both demand and supply, India’s office real estate market is clearly entering a new growth phase.

Stay tuned for Q3 trends as leasing continues its upward trajectory.

Also Read: 17 emerging real estate hotspots across India

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The Asia Pacific office market has shown a robust recovery, with demand surging 10.7% year-on-year (YoY) in Q3 2024, according to the latest Colliers data. The report highlights a significant increase in leasing activity across the region, with demand reaching 2.2 million square meters (23.7 million square feet) in the third quarter, signaling a positive outlook for 2025.

The growth was particularly strong in key markets such as India, New Zealand, and Singapore, where annual leasing activity exceeded 30%. India continued to dominate the region, accounting for over 70% of total demand in Q3 2024, with demand primarily driven by Bengaluru and Hyderabad. India alone saw leasing activity of 1.61 million square meters (17.3 million square feet), far outpacing other markets like China, which contributed 17% of the region’s total demand.

As a result of this surge in demand, average rental rates for Grade A office spaces in major Indian cities rose by up to 10% annually in Q3 2024. This uptick follows a significant recovery phase in India’s office market, which is now poised for expansion. Experts expect rental growth to continue across the country’s top cities, aligning with trends seen in markets like Australia, Japan, and New Zealand.

“The Indian office market is entering a new phase of growth, with increasing demand for premium, ESG-aligned office spaces,” said Arpit Mehrotra, Managing Director of Office Services at Colliers India. “Occupiers’ appetite for best-in-class facilities and green-certified buildings is driving leasing activity, and we expect to see further rental firming as developers integrate sustainable features into new developments.”

The report also notes that demand for high-quality office spaces is a key driver of growth across the region, as businesses prioritize productivity, sustainability, and adaptability in their work environments. This trend, known as the “flight to quality,” is particularly noticeable in India, where premium office spaces are seeing the most significant uptake.

“With the region’s economic outlook remaining positive, office markets are expected to stay resilient, with a strong focus on sustainable, high-quality workspaces,” said Vimal Nadar, Senior Director & Head of Research at Colliers India. “India’s commercial real estate market, in particular, is set to continue its upward trajectory, with a projected uptake of 5-6 million square meters (54-64 million square feet) of Grade A office space in 2024.”

As supply catches up with demand, significant project completions in major APAC markets are expected to fuel further growth in the coming quarters. While rental growth is anticipated to remain stable across the region, the supply-demand balance will play a crucial role in shaping future market conditions.

Mike Davis, Colliers’ Managing Director of Occupier Services in APAC, concluded: “The office market in Asia Pacific is primed for continued growth, driven by the evolving needs of occupiers who prioritize flexibility, sustainability, and innovation in their workspaces.”

The data suggests a promising future for the Asia Pacific office market, with India leading the way as a key player in the region’s commercial real estate landscape.

Also Read: Metro Group Unveils ‘The Presidential’ in Thane with India’s First Live Construction Tracker

The post India Leads Asia Pacific Office Market with 70% of Demand in Q3 2024, Driven by Flight to Quality appeared first on Square Feat India.

In Q2 2024 alone, approximately 13 million square feet of office space was leased in green-certified buildings across the top six cities, marking a significant 24% year-over-year increase and an impressive 82% share of total leasing activity for the quarter. Bengaluru and Mumbai emerged as leaders in this trend, together accounting for over 50% of the green-certified leases in the quarter. Notably, about 60% of these leases were in relatively new developments constructed in the past five years.

Growing Green Certification Among Occupiers

The shift towards green office spaces is driven by an increasing awareness among corporate occupiers of the role that sustainable buildings play in addressing climate change. Prominent green certifications such as LEED, GRIHA, and WELL are becoming more sought after as they offer benefits like lower operational costs, improved indoor air quality, and enhanced employee productivity.

“Over the last few quarters, developers, investors, and occupiers in the office market have increasingly embraced the adoption of sustainable elements in their portfolios. With 13 million square feet of leasing in green-certified buildings in Q2 2024, a significant 82% of occupiers were inclined towards green-certified buildings. This reflects occupiers’ strong commitment to align their sustainability goals with the broader sustainability targets of the country,” said Arpit Mehrotra, Managing Director, Office Services, India at Colliers.

Sector-Specific Trends

Technology and Engineering & Manufacturing firms are at the forefront of this green shift, with about 80% of their leasing activity in green-certified buildings since 2023. Additionally, 62% of flexible workspace providers also prefer green-certified locations. The technology sector alone accounted for 27% of the green-certified leasing, followed closely by Engineering & Manufacturing and BFSI sectors.

City-wise data highlights:

• Bengaluru: 68% of leasing in green-certified buildings, with Engineering & Manufacturing leading.
• Chennai: 79% of leasing in green-certified buildings, predominantly by the Technology sector.
• Delhi NCR: 74% share, with Technology firms driving the trend.
• Hyderabad: 76% share, largely due to Technology firms.
• Mumbai: 72% share, with BFSI sector leading.
• Pune: 71% share, with BFSI sector prominent.

Expansion of Green Office Stock

The green office stock is set to grow substantially. As of June 2024, approximately 67% of Grade A office buildings in the top six cities were green-certified. With nearly 70% of new Grade A office completions in Q2 2024 being green-certified, the trend is expected to continue. Over the next 2-3 years, the green-certified Grade A office stock is projected to exceed 600 million square feet.

“With increased inclination among occupiers for green-certified buildings, several Grade A developers are boosting their sustainable offerings. During Q2 2024, nearly 70% of new supply was green-certified. Developers are also retrofitting older office buildings to meet green standards. About 300-350 million square feet of commercial building stock older than 10 years have the potential for refurbishment, further expanding the green-certified office inventory,” noted Vimal Nadar, Senior Director and Head of Research at Colliers India.

The surge in green office space leasing and development reflects a broader shift towards sustainability in India’s commercial real estate sector, highlighting a significant step towards meeting environmental, social, and governance (ESG) goals.

Also Read: Industrial & warehousing demand remains healthy with about 13 mn sq ft of leasing in H1 2024

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Flex Spaces Surge in India

In India, flex spaces have become a significant component of the commercial real estate market. Since 2019, the stock of flex spaces has doubled, surpassing 50 million square feet (msf) by the second quarter of 2024. The share of flex spaces in occupiers’ portfolios has grown from 5-8% in 2019 to approximately 10-15% in 2024. This surge is driven by the increasing demand for adaptable work environments that cater to dynamic business needs.

“India is a leading player in the APAC flex market, with a penetration rate of 7% compared to 3-4% in other regional markets. The robust growth is evidenced by significant expansions from leading flex operators across major cities. In the first half of 2024 alone, there was 4.4 million square feet of flex leasing. We expect demand to potentially surpass the 2023 high of 8.7 million square feet by year-end,” said Arpit Mehrotra, Managing Director of Office Services at Colliers India.

Key Trends Shaping Corporate Real Estate

Colliers’ report identifies five crucial trends transforming corporate real estate strategies:

1. Enhanced Enterprise Resilience: Companies are focusing on flexibility within their real estate portfolios to withstand market fluctuations and adapt to changing needs. Globally, 80% of CRE leaders plan to reduce or maintain their office space by 2026, highlighting a shift towards more flexible and optimized real estate assets.
2. Workplace Transformation for Talent Management: The rise of hybrid working models is driving changes in workforce management. 59% of CRE leaders globally are expected to use labor market analytics more proactively, underscoring the importance of data-driven decision-making.
3. Artificial Intelligence and Data Integration: AI and data analytics are revolutionizing real estate strategies, enhancing efficiency, and optimizing resource allocation. 31% of CRE leaders see AI as a key area for organizational transformation in the next five years.
4. Diversification in CRE Partnerships: There is a growing trend towards adopting multiple CRE partner models to improve service delivery and operational flexibility. 98% of CRE leaders plan to either maintain or increase their outsourcing strategies in the coming years.
5. Sustainability-Focused Real Estate Upgrades: With increasing regulatory pressures and environmental concerns, there is a strong push towards upgrading legacy real estate assets. 57% of CRE leaders are prioritizing sustainability practices in their real estate decisions.

India’s Green Certification Growth

India has seen a significant rise in green-certified office space. As of Q2 2024, approximately 490 million square feet of India’s Grade A office stock is green-certified, marking a 68% increase since 2019. This growth reflects the heightened demand for sustainable workspaces. Vimal Nadar, Senior Director and Head of Research at Colliers India, noted, “High-performing green assets have gained considerable importance among stakeholders. Sustainable practices, including green building certifications and environmental assessments, will remain critical for developers and investors.”

The report indicates that as the market continues to evolve, innovation, flexibility, and sustainability will be key drivers in shaping the future of commercial real estate in Asia Pacific and India.

Also Read: 58% of companies to expand flexible office space portfolio by 2026

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