Tech Sector Anchors 40% Office Leasing as Global Enterprises Expand India operations: Colliers India

Bengaluru, August 14, 2025: Large-sized deals (≥100,000 sq ft) continue to drive the commercial office market, consistently accounting for a bulk of Grade A office space uptake in the last five years. In H1 2025, too, 51 per cent of the total leasing across the top seven cities was through large-sized deals at 17.2 mn sq feet (MSF), reflecting occupiers’ sustained appetite for high-quality office spaces to support growth strategies.

Trends in Office Leasing across Deal sizes (2020- H1 2025)

Technology Sector Continues to Drive Large-Sized transactions across conventional space

Across the leading seven cities, the technology sector continues to anchor office space demand, sustaining its role as one of the dominant demand drivers.

While its share in overall conventional leasing has seen a marginal dip since 2020, the sector’s leasing volumes have grown steadily in absolute terms, indicating continued expansion. In H1 2025, the sector accounted for more than 10 MSF of Grade A space uptake across the top seven cities, nearly 40 per cent of the overall conventional leasing.

The technology sector, in particular, remains the key driver of the large-sized transactions, indicating expansion and long-term space commitments amidst evolving workplace strategies.

During H1 2025, the sector accounted for 43 per cent of the leasing through large-sized deals within conventional spaces, distantly followed by BFSI companies at 28 per cent. Continued momentum in large-sized deals, especially by leading tech companies, highlights their confidence in the local talent pool, infrastructure, long-term market potential and real estate.

In fact, large-sized tech deals have picked up pace in recent years, with leasing volumes in conventional spaces increasing from 6.4 MSF in 2023 to 8.7 MSF in 2024. H1 2025 has already seen 6.2 MSF of tech leasing through large-sized deals, signalling a sustained expansionary momentum in the sector. With ongoing GCC expansions in the country, digital transformation spearheaded by AI adoption, large-sized deals are poised to remain the driving force of the office market in the next few years.

Trends in Pan India Office Leasing (2020 – H1 2025)

Trends in Leasing by Technology sector within Conventional Office Spaces (2020-H1 2025)

Technology Firms Continue to Anchor Flex Space Demand as well

The technology sector also remains a dominant occupier within flex spaces as leading tech firms continue to adopt agile workspace strategies to support hybrid work models.

The sector accounts for 40-50 per cent of the total flex space demand across the top seven cities of the country. This trend is particularly pronounced in key IT hubs such as Bengaluru, Hyderabad and Pune, where flexible work arrangements enable companies to optimise costs, enhance scalability and attract skilled talent. While the occupier base for flex spaces is steadily diversifying, the technology sector is expected to retain its prominence, driving sustained flex space demand in the next few years.

“The technology sector continues to demonstrate remarkable resilience even amid global uncertainties and workforce adjustment. Since 2020, tech occupiers have leased close to 85 MSF of conventional office space across the top seven cities and accounted for the bulk of large-sized transactions,” said Arpit Mehrotra, MD, Office services, Colliers India.

“In H1 2025 alone, the sector drove 43 per cent of the large-sized transactions of 100,000 sq ft or above. Despite current headwinds, we expect technology occupiers to maintain the leasing momentum throughout 2025 and fuel commercial real estate in India, mainly supported by the expansion of GCCs.”

Meanwhile, a strong IT talent pool and cost arbitrage will continue to be the differentiating factors for the office market.

Bengaluru and Hyderabad continue to drive 50% of the Tech demand

Bengaluru remains the epicentre of the technology sector and has established itself as one of the top five global tech destinations supported by its deep talent pool, mature IT ecosystem and robust office infrastructure.

Hyderabad, meanwhile, continues to strengthen its position as a major technology centre both in India and globally, driven by competitive costs, supportive government initiatives and availability of high-quality office developments.

Together, Bengaluru and Hyderabad account for nearly half of the country’s tech leasing over the last five years, underscoring their dominance as preferred markets for technology occupiers. The two cities are followed by Pune, Chennai and Delhi-NCR with sustained demand from technology firms.

Trends in conventional Leasing by technology sector across key markets

Top 5 Micro-Markets Drive nearly 50% of tech leasing at pan-India level

A mAjority of leading technology micro-markets in the country are concentrated in South India, which has established IT hubs such as ORR & Whitefield in Bengaluru, SBD & Off-SBD in Hyderabad and OMR Zone in Chennai.

These micro markets have consistently witnessed strong traction in technology leasing driven by an established IT/ITeS ecosystem, well-developed social and physical connectivity and the availability of skilled talent in residential catchment areas. Competitive rentals and the availability of relatively larger floor plates in office developments have added to the forward-looking IT policies of these states in southern India.

“India’s technology leasing continues to be dominated by select high-performing IT hubs. In H1 2025, the top micro-markets—ORR & Whitefield in Bengaluru, SBD and Off-SBD in Hyderabad and OMR Zone in Chennai—accounted for nearly half of India’s total tech leasing, a clear testament to their unmatched pull among IT occupiers,” said Vimal Nadar, National Director and Head of Research, Colliers India.

“These hubs have not only weathered market shifts but have set the pace for India’s office sector.  The technology sector is experiencing significant growth and transformation driven by trends like AI adoption, cloud computing and cybersecurity. Ongoing innovation and global servicing capabilities are likely to remain unmatched with the sector potentially accounting for 40-50 per cent of the office space uptake in 2025.”

The IT industry is at the cusp of a structural change where global tech companies are increasingly expanding their operations in India by setting up knowledge and innovation hubs, thereby accelerating the digital revolution in the country.

In fact, per NASSCOM, GCCs in India are projected to increase from around 1,800 to over 2,400 with revenues exceeding $100 billion by 2030. The role of domestic IT firms is also undergoing a steady shift as artificial intelligence, generative learning, machine learning and cloud computing permeate further into the fabric of the IT industry.

Overall, the next few years are likely to be crucial for the technology sector driven by evolving contours between domestic and global tech companies in the country. Real estate requirements by the tech sector, thus, will also continue to undergo a gradual structural transformation over the next few years.