India’s Office Leasing Reaches Unprecedented Heights in Q1 2025
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Synopsis
India's office leasing in Q1 2025 reached a record 19.46 million sq ft, with domestic occupiers making significant contributions. The report indicates strong growth driven by flex and tech sectors, showing resilience in the market.
Key Takeaways
- Q1 2025 office leasing hit a record of 19.46 million sq ft.
- Domestic occupiers accounted for 8.82 million sq ft.
- Bengaluru led leasing at 21.9% share.
- Net absorption rose by 54% year-on-year.
- Vacancy rates dropped to a four-year low of 15.7%.
Mumbai, April 16 (NationPress) India’s office leasing activities for the January-March quarter (Q1) of 2025 have soared to an unprecedented level of 19.46 million square feet (sq ft), with local occupiers accounting for a remarkable 8.82 million sq ft, as reported on Wednesday.
International occupiers continued to play a pivotal role in leasing activities, primarily propelled by Global Capability Centers (GCCs), according to a report from the global real estate company JLL.
In comparison to the previous year, total leasing across the top seven cities increased by 28.4 percent at the national level, with growth observed in all cities except Chennai, the report indicates.
Bengaluru continued to lead for the fourth consecutive quarter in leasing activities, representing 21.9 percent, followed closely by Delhi-NCR at 21.6 percent.
Domestic occupier leasing showed year-over-year growth in Bengaluru, Hyderabad, Mumbai, and Pune.
The flex segment emerged as the dominant force among domestic occupiers in Bengaluru and Pune, capturing 70 percent and 61.8 percent of the domestic space take-up, respectively. In Mumbai, BFSI was the largest contributor, while the tech sector led in Hyderabad’s domestic leasing activities, the report detailed.
“The Indian office market has exhibited exceptional resilience and growth in Q1 2025, supported by the strongest-ever performance from domestic occupiers, driven by flex and third-party tech firms,” stated Samantak Das, chief economist for India at JLL.
The solid performance of BFSI, along with other sectors, has driven net absorption to 12.78 million sq ft in Q1, marking a 54 percent year-on-year increase and further underscoring the expansion-driven demand in India’s office market,” Das added.
The strong presence of global occupiers, particularly GCC setups, which constituted 64.1 percent of international leasing, showcases India’s rising attractiveness as a strategic hub for multinational operations.
“The market's strength is further highlighted by a significant decline in vacancy rates, reaching a four-year low of 15.7 percent, with prime locations experiencing single-digit vacancy rates. The tight vacancy levels in core markets, alongside steady demand, indicate a positive outlook for India's commercial real estate sector,” explained Rahul Arora, Senior Managing Director at JLL.
