Demand For Office Spaces In India’S Top 6 Cities Poised For Double Digit Surge In 2025

(MENAFN- IANS) New Delhi, Feb 11 (IANS) India's top six cities have witnessed significant scale-up in office leasing and supply which is likely to gain further momentum, with gross leasing across the top six cities projected to reach 65-70 million square feet in 2025, according to a report on Tuesday.

The demand from engineering and manufacturing, BFSI firms and flex space operators can surge by 10-15 per cent in 2025, said the report by Real estate consultancy Colliers.

Bengaluru will account for an estimated one-third of the overall office space demand in 2025, led by space uptake from GCCs, engineering and 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 per cent higher compared to the 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,” said Arpit Mehrotra, Managing Director, Office Services, Colliers India.

The report, titled 'India Office: Setting New Standards for 2025,' released at the FICCI '18th Real Estate summit' takes into account continuance of favourable business sentiments and excludes impact of external volatilities or disruptive events.

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 amid 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, according to the report.

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 and energy usage is set to further redefine standards in Indian commercial estate throughout 2025.

Engineering and manufacturing, BFSI firms and flex space operators are expected to drive office demand in 2025, with each segment poised for a 10-15 per cent annual rise in space uptake. Cumulatively, these three sectors are likely to continue to account for half of the leasing activity in 2025. Engineering and manufacturing sector will see heightened activity across most major office markets, with Bengaluru likely to dominate leasing volumes, the report stated.

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 per cent of total leasing activity in 2025.

According to the report, GCC leasing saw a 41 per cent 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 per cent 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 per cent of the GCC demand in 2025, led by Technology, BFSI and Engineering and manufacturing firms.

With REITs in India gaining traction, driven by increasing retail investor participation and favourable 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 realisation of national carbon emission and net-zero goals. Increasing adoption of sustainable elements and low-carbon construction materials in the built environment, especially commercial real estate, can accelerate long-term green economy transition, the report added.

MENAFN11022025000231011071ID1109191781