High-Activity Micro-Markets to Witness 1 MSF of Average Annual Demand, Supply in Next Few Years

Bengaluru, June 19, 2025: The office market has undergone a transformative shift amid continuous demand in the last few years. Interestingly, high-activity micro-markets across the country’s top seven cities have been witnessing consistently high demand and supply since 2020.

These high-activity micro-markets have collectively accounted for two-thirds and three-fourths of Grade A office demand and supply, respectively, since 2020. Of these, four high-activity micro-markets are in Bengaluru, three each in Delhi-NCR and Pune, two each in Chennai and Hyderabad and one in Mumbai.

High-activity office micro-markets: A snapshot

Source: Colliers

Note: Data pertains to Grade A office buildings only. Gross absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed. *Top 7 cities includes Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune.

These high, active micro-markets are spread across secondary and peripheral business districts (SBDs & PBDs) and will continue to drive the office market over the next few years amidst city expansions, ongoing infrastructure developments and evolving work models, according to the latest report by Colliers, ‘India Office: Micro-market insights’.

While existing high-activity micro-markets will continue to grow, other emerging ones too are expected to witness considerable traction and increasingly complement them. Each of these high-activity micro-markets is likely to witness, at least, 1 million sq ft (MSF) of average annual demand and supply and collectively drive more than 80 per cent of the office space demand and new supply in the next few years.

In addition to demand and supply, the report also features leading micro-markets across multiple facets of commercial real estate—rentals and vacancy along with aspects such as sectoral focus, Global Capability Centre (GCC) hubs, flex and green penetration and REITability, etc.

India’s high-activity office micro-markets

Source: Colliers

Note: Data pertains to Grade A office buildings only. Gross absorption does not include lease renewals, pre-commitments and deals where only a letter of intent has been signed. Weighted Average Quoted (WAQ) rents are in INR per square feet per month.

Bengaluru: Outer Ring Road stretches from KR Puram to Hebbal and Sarjapur JN to Marathahalli. Whitefield includes Brookfield, Whitefield and Hoodi. Secondary Business District 1(SBD 1) includes Koramangala, CV Raman Nagar, IRR, Indiranagar, Old Airport Road, Old Madras Road, Rajajinagar and others. North Bengaluru includes Bellary Road, Hebbal, Hennur, Thanisandra Road, Yelahanka and Yeshwanthpura.

Chennai: OMR Zone 1 includes Old Mahabalipuram Road Pre-Toll: Madhya Kailash-Perungudi and MPR-Mount-Poonamallee High Road.

Hyderabad: Secondary Business District (SBD) includes Kondapur, HITEC City, Raidurg, Madhapur, etc. Off SBD includes Gachibowli, Nanakramguda, Financial District, Kokapet, etc.

Mumbai: Andheri East includes Andheri, Andheri-Kurla Road, Vile Parle and Chandivali.

Pune: Central Business District (CBD) includes Bund Garden Road, Camp, FC Road, JM Road, Koregaon Park, Koregaon Park Annex, Kalyani Nagar, Shivaji Nagar, Raja Bahadur Mills Road, Senapati Bapat Road, Wakdewadi and Yerwada. Baner-Balewadi includes Aundh, Baner, Balewadi, Bavdhan and Pashan.

“India’s office market is poised for a steady, strong growth led by 15-20 high-activity micro-markets. While some of these markets are already established commercial real estate hubs, emerging micro-markets can potentially scale up and witness heightened traction in the upcoming years,” said Arpit Mehrotra, MD, Office services, India, Colliers.

“Annual demand and supply in each 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.”

Fifty-nine per cent of the flex space uptake and 73 per cent of the GCC leasing since 2020 is concentrated in the top 10 micro-markets.
 
Of the total 38 MSF of flex space leasing across the top seven cities since 2020, 59 per cent corresponded to the top 10 micro-markets. Within these, SBD-Hyderabad, ORR-Bengaluru, Baner-Balewadi and Pune cumulatively drove around one-third of the flex space uptake. Overall, the annual flex space demand in these top 10 micro-markets has surged from 1.3 MSF in 2020 to 7.3 MSF in 2024 at a CAGR of 54 per cent.
 
On the GCC front, nearly 70 MSF of GCC demand during the last five years has been concentrated in the top 10 micro-markets, accounting for 73 per cent of the total GCC leasing. 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 Grade A space uptake by GCCs since 2020.

Interestingly, GCCs are spread across micro-markets having a wide rental spectrum and continue to favour India on account of skilled talent availability, sectoral diversification and usage functionality of GCC hubs.

Global companies will continue to prefer having a presence in SBDs & PBDs of major cities nearer to the employee catchment areas and have seen a significant improvement in accessibility driven by infrastructure developments.
 
Mumbai and Delhi-NCR dominate the list of micro-markets with the highest rentals and lowest vacancy levels.

Although most micro markets have seen rental appreciation compared to pre-pandemic levels, select ones in Mumbai and Delhi-NCR continue to lead in 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 the highest rentals in India.
 
Similarly, almost 30 per cent of the office micro-markets in India have sub-10 per cent vacancy levels compared to the 16.2 per cent vacancy at the India level. In fact, owing to demand significantly outpacing supply in recent years, Goregaon/JVLR, CBD, Thane, LBS/Eastern Suburbs & BKC in Mumbai; Aerocity, Cybercity and 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 a high demand and supply compared to the rest. A majority of these high-activity micro-markets will continue to have potentially higher rental upside and are likely to lean towards landlords/developers,” said Vimal Nadar, National Director and Head of Research, Colliers India.

“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.” 

Seventy-two per cent of Grade A inventory in the top 10 micro-markets is REIT-worthy. 

Of the 488 MSF of REIT-worthy office stock in India, 56 per cent is in the top 10 micro-markets. Interestingly, 275 MSF of Grade A inventory (as of Q1 2025), corresponding to 72 per cent 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 per cent of REIT-worthy office stock. These four micro-markets cumulatively have more than 35 MSF of office stock already under existing REITs.