Top Micro Markets Driving 80% of India’s Office Space Demand & Supply: Colliers
India’s office market has seen a significant transformation in recent years, with sustained demand growth across key cities. According to Colliers’ latest report “India Office: Micro Market Insights”, high-activity micro markets in the top seven cities have driven a majority of the country's Grade A office space development since 2020. These micro markets have accounted for nearly two-thirds of office space demand and three-fourths of supply during this period.
The report identifies 15 high-activity micro markets: four in Bengaluru, three each in Delhi NCR and Pune, two each in Chennai and Hyderabad, and one in Mumbai. These are primarily located in secondary and peripheral business districts (SBDs and PBDs) and are expected to continue leading India’s office space growth in the coming years, supported by city expansion, evolving work models, and major infrastructure developments.
Each of these top-performing micro markets is projected to record at least 1 million sq ft of annual office space demand and supply, collectively contributing over 80% of India’s office leasing activity in the near future. The report also highlights critical indicators such as rent trends, vacancy levels, REIT potential, green building penetration, sectoral demand, and the presence of Global Capability Centers (GCCs) and flex spaces, offering a comprehensive view of India’s commercial real estate landscape.
“India’s office market is poised for a steady strong growth, led by 15-20 high-activity micro markets. While some of these micro markets are already established commercial real estate hubs, emerging micro markets can potentially scale up and witness heightened traction in the upcoming years. Annual demand and supply in each of these high activity micro markets is likely to exceed one million sq ft, driving contours of commercial real estate in India. Interestingly, India will continue to be strategically positioned in terms of rental arbitrage, with more than half of the Grade A demand expected in micro markets having sub or near dollar rentals,” said Arpit Mehrotra, Managing Director, Office services, India, Colliers.
59% of the flex space uptake & 73% of the GCC leasing since 2020 concentrated in top 10 micro markets
Of the total 38 million sq ft of flex space leasing across the top seven Indian cities since 2020, 59% corresponded to the top 10 micro markets. Within these, SBD-Hyderabad, ORR-Bengaluru & Baner-Balewadi, Pune cumulatively drove around one-third of the flex space uptake in India. Overall, the annual flex space demand in these top 10 micro markets has surged from 1.3 million sq ft in 2020 to 7.3 million sq ft in 2024 at a CAGR of 54%.
On the GCC front, nearly 70 million sq ft of GCC demand during the last five years has been concentrated in the top 10 micro markets, accounting for 73% of the total GCC leasing in India. Micro markets such as ORR, Whitefield, SBD 1 and North in Bengaluru, SBD & Off SBD in Hyderabad and OMR Zone 1 & MPR in Chennai, collectively have accounted for two-thirds of the country’s Grade A space uptake by GCCs since 2020. Interestingly, GCCs in India are spread across micro markets having a wide rental spectrum and continue to favor India on account of skilled talent availability, sectoral diversification and usage functionality of GCC hubs. Going ahead, global companies will continue to prefer having a presence in SBDs & PBDs of major Indian cities which are nearer to the employee catchment areas and have seen significant improvements in accessibility driven by infrastructure developments.
Mumbai & Delhi NCR dominate the list of micro markets with highest rentals and lowest vacancy levels
Although most micro markets in India have seen a rental appreciation compared to pre-pandemic levels, select micro markets in Mumbai and Delhi NCR continue to lead in terms of average rentals. BKC, CBD, Lower Parel, Worli-Prabhadevi, Goregaon/JVLR and Kalina in Mumbai and CBD, Aerocity, Golf Course Road & South Delhi in Delhi NCR feature prominently in the list of micro markets having highest rentals in India.
Similarly, almost 30% of the office micro markets in India have sub 10% vacancy levels, compared to the 16.2% vacancy at India level. In fact, owing to demand significantly outpacing supply in recent years, Goregaon/JVLR, CBD, Thane, LBS/Eastern Suburbs & BKC in Mumbai and Aerocity, Cybercity & MG Road in Delhi NCR, CBD in Bengaluru and Guindy in Chennai continue to have one of the lowest vacancy levels in the country.
“Interestingly, most of the micro markets which have seen high rental appreciation since 2020 had significantly high demand & supply as compared to the rest. Majority of these high-activity micro markets will continue to have potentially higher rental upside and are likely to lean towards landlords/developers. In addition to the preference for premium offerings, occupiers will increasingly prefer sustainable elements and green certified office buildings. Consequently, average occupancy levels in green-certified buildings of these high-activity micro markets will be appreciably higher than occupancy levels of non-green certified buildings in respective micro markets,” said Vimal Nadar, National Director & Head of Research, Colliers India.
72% of Grade A inventory in top 10 micro markets is REIT-worthy
Of the 488 million sq ft of REIT-worthy office stock in India, 56% is in the top 10 micro markets. Interestingly, 275 million sq ft of Grade A inventory (as of Q1 2025) corresponding to 72% of the overall stock in these micro markets is already under REITs or has the potential to be listed as future REITs. In fact, key micro markets in Bengaluru (ORR & Whitefield) and Hyderabad (SBD & Off SBD) collectively hold 38% of India’s REIT-worthy office stock. These four micro markets cumulatively have more than 35 million sq ft of office stock already under existing REITs.
