Will India's High-Activity Micro Markets Drive 80% of Office Demand and Supply Soon?
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Synopsis
India's office market is on the rise! High-activity micro markets are set to dominate with over 80% of demand and supply in the coming years. Discover the key players and trends shaping this transformation.
Key Takeaways
- High-activity micro markets are key drivers of office space demand in India.
- Projected demand of 1 million sq ft annually.
- Over 80% of new supply will come from these micro markets.
- Major cities include Bengaluru, Delhi-NCR, and Pune.
- Rental rates have seen overall appreciation.
Bengaluru, June 19 (NationPress) The high-activity micro office markets in India are projected to experience a minimum of 1 million square feet in average annual demand and supply, collectively accounting for over 80% of the office space demand and new supply in the coming years, according to a report released on Thursday.
Since 2020, high-activity micro markets across the country's top seven cities have demonstrated a consistent trend of elevated demand and supply. Among these, Bengaluru hosts four high-activity micro markets, while Delhi-NCR and Pune each have three, Chennai and Hyderabad have two each, and Mumbai has one, as per Colliers data.
These micro markets are situated in secondary and peripheral business districts and are set to continue influencing the Indian office market in the forthcoming years due to city expansions, ongoing infrastructure projects, and evolving work paradigms.
“India’s office sector is on the brink of robust growth, driven by 15-20 high-activity micro markets. While some of these have already established themselves as commercial real estate centers, emerging micro markets are likely to gain traction and flourish in the coming years,” stated Arpit Mehrotra, Managing Director of Office Services in India at Colliers.
Notably, India will maintain a strategic advantage in terms of rental arbitrage, with over half of the Grade A demand anticipated in micro markets offering sub or near dollar rentals, added Mehrotra.
Out of the total 38 million sq ft of flexible space leased across the top seven Indian cities since 2020, 59% has been attributed to the top 10 micro markets. Among these, SBD-Hyderabad, ORR-Bengaluru, and Baner-Balewadi in Pune collectively accounted for about one-third of the flexible space absorption in India.
Regarding the GCC sector, nearly 70 million sq ft of GCC demand over the past five years has been concentrated in the top 10 micro markets, which represent 73% of the total GCC leasing in India, as reported.
While most micro markets across India have experienced rental increases compared to pre-pandemic levels, select micro markets in Mumbai and Delhi-NCR continue to lead in terms of average rental rates. Of the 488 million sq ft of REIT-worthy office inventory in India, 56% is located within the top 10 micro markets.
Point of View
It is evident that India's office market is on the cusp of a significant transition. The rise of high-activity micro markets reflects broader trends in urbanization and flexible work models. With strategic investments and infrastructure developments, these micro markets are set to redefine the commercial landscape in India.
NationPress
19/06/2025
Frequently Asked Questions
What are high-activity micro markets?
High-activity micro markets are specific regions within major cities that show significant demand for office spaces, often influenced by business districts and infrastructure developments.
Which cities in India have high-activity micro markets?
The top seven cities with high-activity micro markets include Bengaluru, Delhi-NCR, Pune, Chennai, Hyderabad, and Mumbai.
What is the expected office space demand in India?
India's high-activity micro markets are projected to drive over 80% of the office space demand and new supply, with an annual demand of at least 1 million square feet.
How has the rental market changed in India?
Most micro markets have experienced rental appreciation compared to pre-pandemic levels, although certain markets in Mumbai and Delhi-NCR still lead in average rentals.
What percentage of flexible space leasing is from top micro markets?
59% of the total flexible space leasing across the top seven Indian cities since 2020 is attributed to the top 10 micro markets.
