Office leasing in India rises 15 pc to 15.9 million square feet in Q1 2025

Bengaluru, March 27: Office leasing across the top seven markets in India remained strong in Q1 2025 at 15.9 million square feet — a 15 per cent year-on-year (YoY) increase, a new report showed on Thursday. Overall new supply touched 9.9 million square feet during Q1 2025, almost at par with the same period last year.

Bengaluru and Delhi-NCR together drove about half of the total leasing and two-third of the new supply during Q1. While Delhi NCR saw its highest quarterly leasing in the last 10 quarters, Chennai too witnessed a remarkable 93 per cent YoY surge at 2.9 million square feet, driven by space take-up by technology firms, according to a Colliers report. “Key markets are seeing strong Grade A space uptake, driven by corporate expansions, rising investments in commercial real estate, amid promising domestic growth prospects,” said Arpit Mehrotra, Managing Director, Office Services, India, Colliers.

“We anticipate the demand momentum to gain pace throughout 2025, fuelled by expansionary plans of leading firms across Technology, Engineering and Manufacturing and BFSI sectors,” he added. Additionally, aided by the policy level push in major states, long-term demand for GCCs will continue to remain strong in most tier 1 and select tier 2 cities of the country. Delhi-NCR and Pune witnessed multifold growth in new completions, as compared to Q1 2024. In fact, almost 90 per cent of the new supply during Q1 2025 was concentrated in three cities – Bengaluru, Delhi-NCR and Pune. With demand outpacing new supply across most cities, average office rentals increased annually by 8 per cent during Q1. Of the 15.9 million square feet of Grade A office space demand in Q1 2025, 86 per cent came from conventional workspaces.

Flex space leasing, meanwhile, at 2.2 million square feet witnessed a 22 per cent YoY growth. Technology sector continued to drive office space demand, leasing 4.4 million square feet of conventional office space during Q1 — 28 per cent of the total demand during the quarter. “Consequently, flex spaces are likely to gain further prominence, and their share in occupiers’ portfolio can potentially reach 12-15 per cent in the coming years”, said Vimal Nadar, Senior Director and Head of Research, Colliers India.