BFSI Firms Drive Office Demand to Over 100% YoY Growth in Jan-Mar 2025

New Delhi, April 4, 2025: Real estate consulting firm CBRE South Asia Pvt. Ltd has announced the findings of its report, ‘CBRE India Office Figures Q1 2025. The report highlights that Banking, Financial Services, and Insurance (BFSI) firms recorded over 100 per cent year-on-year (YoY) growth in office leasing in January-March 2025, accounting for a 26 per cent share of total office leasing. GCCs accounted for 57 per cent of the BFSI leasing in January-March 2025. American banks (48 per cent) followed by domestic banks (31 per cent) dominated BFSI leasing in the quarter. Moreover, American BFSI firms contributed to 70 per cent of the GCC leasing within BFSI sector. Besides, this growth is significantly driven by Mumbai & Delhi together accounting for 60 per cent of overall BFSI leasing in the quarter.

On a pan-India basis, the office sector recorded a gross absorption of 18.0 million square feet (msf) in the January-March 2025 period, reflecting a 5 per cent year-over-year growth. Bengaluru, Delhi-NCR, and Mumbai collectively accounted for approximately 64 per cent of the total leasing activity.

Other than the BFSI sector, the technology sector maintained a steady 24 per cent share, while flexible space operators contributed 12 per cent. Engineering and manufacturing firms held an 11 per cent share, followed by research, consulting and analytics companies at 8 per cent, and life sciences firms at 5 per cent in January-March 2025

Global corporates accounted for 62 per cent of office space leasing, with American firms leading at 45 per cent, followed by EMEA at 12 per cent and APAC at 5 per cent. Domestic firms contributed 38 per cent to the total leasing activity. The demand from American corporates was primarily driven by the technology and the BFSI firms.

Global Capability Centres (GCCs) office leasing in Q1 2025 (January -March 2025), accounted for 45 per cent of quarterly leasing at 8.0 msf registering 66 per cent year-over-year growth. GCC Leasing in Q1 2024 stood at 4.8 msf. Bengaluru dominated GCC leasing with a 40 per cent share, followed by Delhi at 24 per cent, Chennai at 14 per cent, Hyderabad at 10 per cent, while Mumbai and Pune accounted for 6 per cent and 5 per cent, respectively.

Leasing in green-certified assets accounted for 81 per cent of total office space take-up (14.7 msf) while 88 per cent of new supply (8.6 msf) was green-certified in Q1 2025. This underscores the increasing commitment of both occupiers and developers to environmental, social, and governance (ESG) principles and sustainability initiatives. Bengaluru led with a 38 per cent share in green-certified supply and 29 per cent in leasing, followed by Delhi-NCR at 29 per cent and 24 per cent, respectively. Pune contributed 33 per cent of the green-certified supply and 4 per cent of leasing, while Mumbai recorded a 17 per cent leasing in green-certified assets. Hyderabad and Chennai accounted for 11 per cent and 10 per cent of leasing in green-certified developments, respectively, while Kolkata and Ahmedabad contributed 3 per cent and 2 per cent, respectively.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “India’s office sector is on a solid trajectory for sustained leasing growth, driven by strategic expansions from both domestic and global occupiers. Established hubs like Bengaluru, Hyderabad, Delhi-NCR, and Mumbai continue to lead, while cities like Chennai and Pune are gaining traction due to a strong talent base and a well-positioned supply pipeline. As businesses seek quality workspaces, the demand for sustainable offices is rising, with occupiers prioritizing employee experience and long-term growth. A key factor shaping this momentum is the growing presence of Global Capability Centers (GCCs). As multinational firms consolidate, their expansion, alongside the continued rise of BFSI, technology, and emerging sectors, reinforces India’s position as a global business hub. With strategic investments and a maturing office landscape, the sector is poised for long-term resilience and evolution.”

Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE India, said, “India is rapidly evolving as a global hub for GCCs, with multinational firms leveraging its skilled workforce to drive innovation and digital transformation. In 2025, GCCs are expected to account for nearly 35-40 per cent of total office space absorption, with expansions not just in metro cities but also in emerging business hubs, supported by favorable state policies. While U.S. firms remain dominant, European and Asian corporations are increasingly establishing GCCs in India, drawn by its cost efficiency and mature operational ecosystem. The technology and BFSI sectors will continue to drive this demand, with high-value capabilities emerging in aerospace, semiconductors, and life sciences. With companies viewing India as a strategic growth destination, the GCC sector is set to be a key pillar of the country’s office market expansion.”

Outlook and Other Observations

Office sector positioned for sustained leasing growth across diverse occupier segments

• Sustained Growth Momentum: Building on two years of record leasing, the office sector is poised for continued expansion in 2025.
• Portfolio Expansion & Investments: Growth is expected to be driven by domestic and global firms strategically expanding their portfolios and making planned investments.
• Technology as a Key Demand Driver: Strong hiring expected in AI, ML, data analytics, and cloud computing will fuel office space demand.
• BFSI & E&M Sector Growth: These sectors are likely to continue expanding, led by digitalisation initiatives.
• Emerging Sectors on the Rise: Life sciences, semiconductors, and automobiles are anticipated to witness sustained demand.
• Established Markets Leading: Bengaluru, Hyderabad, Delhi-NCR, and Mumbai are expected to continue dominating leasing activity.
• Chennai & Pune Gaining Traction: A strong supply pipeline and skilled talent base are driving growth in these cities.
• Expansion into Tier-II Cities: Businesses are exploring new markets beyond metro hubs for strategic growth.
• Focus on Quality Workspaces: Domestic companies are prioritising premium office spaces to support long-term expansion.

GCCs set to strengthen their India foothold

• India as a GCC Hub: Global corporations are leveraging India’s talent pool, positioning GCCs as strategic hubs and secondary headquarters.
• Innovation & Digital Transformation: GCCs play a crucial role in driving high-value capabilities and digital initiatives.
• Multi-Functional Expansion: Growth is fuelled by the consolidation of existing operations and the entry of new firms.
• Rising Share in Leasing: GCCs are projected to account for 35-40 per cent of total office space absorption in 2025.
• State-Specific Policies Boosting Growth: Incentives could drive leasing expansion beyond metro cities into smaller hubs.
• Technology Sector Leading Demand: Advanced solutions in AI, ML, and cloud computing are expected to drive GCC leasing.
• BFSI & E&M Sector Growth: Strong leasing activity is anticipated due to ongoing digital transformation efforts.
• Emerging Industries in GCCs: Semiconductors, aerospace, automobiles, and life sciences are likely to witness rising demand.
• Increasing Presence of Non-U.S. Firms: US-based firms are expected to remain key contributors to GCC leasing. In addition, European and Asian firms are expanding in India, attracted by a mature ecosystem and skilled workforce.
• Cost-Effective Talent & Short go-to-market Timelines: India’s competitive advantage continues to attract new GCC entrants.

Increased focus on investment-grade assets with future-ready workspaces and elevated employee experience

• Strong Investment Inflows: Inflow of investments in under-construction office assets, reinforcing expectations of sustained institutional-grade developments.
• Resilient Supply Pipeline: Several high-quality, investment-grade office assets set to enter the market in 2025.
• Leading Cities for New Completions: Bengaluru, Hyderabad, and Delhi-NCR expected to dominate, followed by Pune, Mumbai, and Chennai.
• Concentration in Integrated Tech Parks: 60-65 per cent of new completions projected to be concentrated in integrated tech parks across major cities, reflecting a shift toward premium-grade developments.
• Focus on Green-Certified, Amenitised Workspaces: Developers prioritising sustainability and employee-centric office environments.
• Hybrid Work & Agile Spaces: Rise in reconfigurable layouts, energy-efficient designs, and high-end amenities to support evolving workforce needs.
• Emphasis on Workplace Experience: Hospitality-driven office environments set to enhance productivity, collaboration, and employee wellbeing.
• Balanced Supply-Demand Dynamics: Steady growth in demand expected to drive vacancy compression and stimulate further rental appreciation in 2025 across key micro-markets.
• Sustainability as a Core Feature: LEED and IGBC certifications becoming standard, with an industry-wide focus on eco-friendly materials and energy-efficient designs.
• State Government Incentives for Green Developments: Tax concessions and regulatory measures likely to drive adoption of sustainable real estate practices.