India’s Office Market Poised for Record Growth in 2025: Colliers
India’s top six cities are witnessing a strong surge in office leasing and supply, setting new records year after year. Driven by evolving occupier preferences, gross leasing across these cities is projected to reach 65-70 million sq ft in 2025, according to Colliers' latest report, India Office: Setting New Standards for 2025, released at the FICCI 18th Real Estate Summit. This forecast assumes continued business optimism while excluding potential external disruptions.
The growth is fueled by a diversified occupier base, expanding Global Capability Centers (GCCs), and strong demand from domestic businesses. The market is shifting from a supply-driven model to an occupier-led landscape, prompting developers to adapt office spaces to evolving needs.
An estimated 60-65 million sq ft of new office space is expected to enter the market in 2025. A greater focus on energy efficiency and sustainable materials will further redefine India’s commercial real estate sector in the coming year.
“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.
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.
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.
With REITs in India gaining traction, driven by increasing retail investor participation and favorable regulatory environment, developers are focusing on curating high-quality real estate portfolios. Simultaneously, the growing occupier demand for sustainable, green-certified developments can fast-track the realization of national carbon emission and net-zero goals. Increasing adoption of sustainable elements and low-carbon construction materials in built environment especially commercial real estate can accelerate long-term green economy transition.
“India’s commercial real estate is focused on creating high-quality assets and leading developers are prioritizing construction of high-quality, rent-yielding assets, to ultimately list them as REITs. At the same time, rising demand for green-certified workplaces is pushing developers to align with global sustainability standards, and increasingly focus on energy efficiency, carbon reduction, and environmental compliance. Over the past few years green leasing has been gaining traction and 80-85% of Grade A office space demand in 2025 is likely to be concentrated in green-certified developments." says Vimal Nadar, Senior Director & Head of Research, Colliers India.
