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IT-ITeS Sector Dominates Office Space Absorption, Flex Spaces Trail With 14% Share: Vestian

New Delhi, July 25, 2025: Flex spaces accounted for 14 per cent oftotal absorption in Q2 2025, up from 9 per cent in the previous quarter. The area absorbed by flex spaces increased by 68 per cent over the previous quarter, reaching 2.63 mn sq ft (MSF) in Q2 2025.

Moreover, the southern cities of Bengaluru, Chennai and Hyderabad accounted for nearly 80 per cent of the area absorbed by flex spaces across the top seven cities, underscoring the growing prominence of flex spaces in these cities.

Even though the share of flex spaces has increased significantly, IT-ITeS sector continued to dominate absorption with 9.4 MSF in Q2 2025. Nearly half of the absorption by IT-ITeS sector was concentrated in the localities of Yeshwantpur (Bengaluru), Nanakramaguda (Hyderabad) and Airoli (Mumbai).

The top seven cities recorded 36.75 MSF of absorption in H1 2025, registering 21 per cent increase over the same period a year earlier. With this growth rate, absorption could surpass 75 MSF by the end of 2025, potentially reaching the highest-ever absorption in any calendar year.

*Other sectors include aviation, consulting services, engineering and manufacturing, retail, healthcare and lifesciences, infra, real estate and logistics, electronics, automotive, e-commerce, FMCG/FMCD, telecom and media, metals and mining and energy.

Source: Vestian Research

The second quarter of 2025 maintained its growth momentum amid global macroeconomic uncertainties and geopolitical frictions. As a result, absorption rose by 10 per cent annually and 5 per cent quarterly, reaching 18.79 MSF in Q2 2025.

This could be attributed to the significant increase in real estate activities in the southern cities with their share rising from 46 per cent in Q1 2025 to 59 per cent in Q2 2025.

Shrinivas Rao, CEO, Vestian, said, “India’s office market continued to grow in Q2 2025 largely driven by robust absorption in major cities like Bengaluru, Hyderabad and Mumbai. As more enterprises are transitioning back to in-office operations and several grade-A office projects are planned to be completed in the second half of 2025, the growth momentum is anticipated to continue with an increase in office utilisation ratio.”

Office Market Summary: Q2 2025