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Growth Momentum Remains Strong in H1 2025 With 33.7 MSF of Grade A Space Uptake, 13% YoY Growth

Bengaluru, June 26, 2025: The office market continued its strong growth trajectory in Q2 2025 recording 17.8 mn square feet (MSF) of gross leasing across the top seven cities, an 11 per cent increase compared to Q2 2024. This also marks a 12 per cent growth compared to the office space demand in the first quarter of the year and underscores the resilience of commercial real estate even in the wake of ongoing global uncertainties.

Bengaluru led leasing activity during Q2 2025 with a 27 per cent share at 4.8 MSF, reaffirming its position as India’s top office market. Hyderabad, Mumbai and Chennai also witnessed strong occupier traction, each recording over 2.5 MSF of leasing in the quarter—reflecting broad-based demand across established office markets.

In fact, five out of the top seven office markets witnessed a growth in Grade A space uptake on an annual basis. This momentum signals growing occupier confidence, particularly from flex space operators and firms across sectors such as technology, BFSI and engineering and manufacturing, etc.

“India’s office market continues its upward trajectory in 2025 building on the momentum of past two years. The robust performance in the first half—with demand reaching 33.7 million square feet, a 13 per cent year-on-year increase—signals sustained occupier confidence and strong market fundamentals,” said Arpit Mehrotra, MD, office services, India, Colliers.

“The fact that five of the seven major cities recorded over 2.0 million square feet of leasing each in a single quarter highlights the depth and vibrancy of India office market. Backed by diversifying occupier base, a steady supply pipeline and growing investor appetite, 2025 is shaping up to be another impressive year for commercial real estate in India. Overall, office space demand looks well placed to reach 65-70 million square feet at least by the end of the year.”

Trends in Grade A gross absorption (in mn sq feet)

Source: Colliers

Gross absorption does not include lease renewals, pre-commitments and deals where only a letter of Intent has been signed.

Top seven cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune

Bengaluru and Hyderabad together drove more than half of new supply during Q2 2025 with Pune also seeing notable completion.

New supply across the top seven office markets remained strong in Q2 2025 with 14.9 MSF of completions—an 11 per cent increase YoY. Bengaluru and Hyderabad together accounted for over half of the quarter’s new supply while Pune also saw notable completion at 3.3 MSF.

On a half yearly basis too, new supply was concentrated in Bengaluru, Pune and Hyderabad. These three cities cumulatively accounted for 70 per cent of the 24.8 MSF of completions in H1 2025.

Trends in Grade A new supply (in mn sq feet)

Source: Colliers

Trends in conventional and flex space leasing (in million sq feet)

Source: Colliers

Office leasing in Q2 2025 remained broad-based with traction in both conventional and flex space uptake. Of the total 17.8 MSF of leasing across the top seven cities, leasing by flex space operators stood at 4.3 MSF. Following the all-time high quarterly demand in Q4 2024, flex operators took more than 4 MSF of Grade A space for the second time ever in Q2 2025.

Conventional leasing remained buoyant at 13.5 MSF led primarily by the technology and BFSI sectors. Technology firms alone accounted for 6.4 MSF space uptake—a 42 per cent YoY growth driven largely by Global Capability Centre expansion. Cumulatively, technology occupiers have leased over 10 MSF of conventional space in H1 2025, reflecting the sector’s criticality and its role in shaping the office market trajectory.

“Flex spaces are increasingly establishing themselves as a key demand driver in India’s office market. With 4.3 million square feet of leasing in Q2 2025—a 65 per cent YoY rise—flex operators are not just fuelling demand but also actively defining occupier workplace preferences,” said Vimal Nadar, National Director and Head of research, Colliers India.

“While Bengaluru continues to be the epicentre, accounting for one-third of the flex activity during Q2 2025, other mature markets such as Mumbai, Hyderabad and Chennai continue to witness notable flex space uptake. Given the current momentum, flex spaces are likely to define contours of commercial real estate in India throughout 2025 and beyond.”

Although office space demand continued to outpace new supply across most cities in the second quarter of the year, vacancy levels remained rangebound on account of relocations and churns.

While overall vacancy level remained almost stable at 16.2 per cent, Pune and Hyderabad, with significant completions in Q2 2025, were at relatively higher vacancy levels. Average rentals, meanwhile, remained largely stable on a sequential basis. Overall, the office market with its wide rental spectrum across cities and micro markets continued to present an attractive proposition for global players to consolidate in India.

Key deals Q2 2025 pan India (conventional leasing)