Technology, Flex spaces, BFSI, Engineering & Manufacturing have emerged as key sectoral demand drivers for commercial office real estate which is set for a 10-15% year on year growth in 2025.

According to Colliers- Ficci Report, India’s   top six cities which have witnessed significant scale-up in office leasing and supply,  mainly driven by evolving occupier preferences, is likely to gain further momentum, with gross leasing across the top six cities projected to reach 65-70 million sq ft in 2025. 

The surge in overall leasing volume is likely to be driven by diversification of occupier base, continued expansion of Global Capability Centers (GCCs) and business optimism amidst domestic occupiers. The office market will continue to evolve from a supply-led environment to an occupier-driven landscape, shaping the next growth phase of commercial real estate in India. This transition has pushed developers to become more agile and tailor office spaces to match evolving occupier needs. Approximately 60-65 million sq ft of new supply is anticipated in 2025. Moreover, a growing emphasis on energy efficiency and sustainable material & energy usage is set to further redefine standards in Indian commercial estate throughout 2025.

Source: Colliers

“Bengaluru will account for an estimated one-third of the overall office space demand in 2025, led by space uptake from GCCs, engineering & manufacturing firms and flex space operators. While Bengaluru will continue to lead the other major markets by a considerable margin, Hyderabad and Delhi- NCR are likely to see heightened activity and register 10-15 million sq ft of leasing activity each, 5-10% higher compared to previous year. Mumbai, Chennai and Pune will meanwhile continue to be preferred by occupiers from BFSI and Engineering & manufacturing sectors and flex space operators respectively. The three cities are likely to witness 5-10 million sq ft of Grade A office space demand each in 2025.” says Arpit Mehrotra, Managing Director, Office Services, Colliers India.

City-wise office market 2024 & 2025 outlook

Note: Data pertains to Grade A buildings only | Gross absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed

Source: Colliers

Engineering & manufacturing, BFSI firms and flex space operators are expected to drive office demand in 2025, with each segment poised for a 10-15% annual rise in space uptake. Cumulatively, these three sectors are likely to continue to account for half of the leasing activity in 2025. Engineering & manufacturing sector will see heightened activity across most major office markets, with Bengaluru likely to dominate leasing volumes. BFSI firms will continue to prefer having a presence in Mumbai, but increasing traction in Bengaluru, Hyderabad, and Pune highlights a growing trend of diversification beyond traditional hubs. Meanwhile, flex space operators are set to emerge as one of the leading demand drivers, accounting for nearly 20% of total leasing activity in 2025.

Sectoral Leasing in 2024 and 2025F

Note: Data pertains to Grade A buildings only and top 6 cities include- Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune | Gross absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed

Source: Colliers

GCC leasing saw a 41% YoY increase in 2024, at 25.7 million sq ft across the top 6 cities. This demand is expected to further increase and be close to 30 million sq ft, accounting for around 40% of the total office space demand in 2025. Bengaluru and Hyderabad are likely to remain preferred knowledge and innovation-driven GCC hubs. In line with past trends, US-based companies are likely to drive GCC expansion across most markets and contribute around 70% of the GCC demand in 2025, led by Technology, BFSI & Engineering & manufacturing firms.