Is India’s office real estate sector thriving in H1 2025, with GCCs as key drivers?

New Delhi, July 7 (NationPress) The office real estate market in India is witnessing significant growth, with the gross leasing volume across the top eight cities hitting 21.4 million square feet (MSF) in the April-June quarter (Q2). This represents a 5 percent increase quarter-on-quarter, according to a report released on Monday.

With the H1 2025 gross leasing now totaling approximately 42 MSF, the sector is well-positioned to exceed 90 million square feet of annual leasing activity, setting a new record and reaffirming strong occupier confidence, as stated in the report by Cushman & Wakefield.

This upward trend follows an impressive performance in 2024, which saw around 89 million square feet leased, with H1 2024 figures comparable to this year’s. If current trends continue, 2025 is set to be the second consecutive year with over 85 million square feet of gross leasing, establishing a new standard for market performance, the report noted.

The robust leasing figures reflect a strong demand from both global and domestic occupiers, with Global Capability Centres (GCCs), IT-BPM firms, flexible workspace providers, BFSI, as well as engineering and manufacturing companies propelling growth.

The gross leasing volume encompasses all leasing activities in the market, including new leases, corporate renewals, and pre-leases, serving as an overall indicator of market activity.

In terms of city contributions, Bengaluru (5.0 MSF), Delhi NCR (4.6 MSF), and Mumbai (3.9 MSF) together accounted for about 63 percent of the quarterly leasing volume. Other cities included Pune (3.3 MSF), Chennai (2.2 MSF), Hyderabad (1.7 MSF), Kolkata (0.5 MSF), and Ahmedabad (0.2 MSF).

Net absorption, a vital measure of real estate demand, indicated a year-on-year growth of 19 percent, reaching 13.5 MSF in Q2 and totaling 27.8 MSF for H1 2025. Delhi-NCR (5.2 MSF), Pune (4.3 MSF), and Chennai (3.1 MSF) achieved their highest half-yearly net absorption ever, showcasing enduring occupier confidence in the Indian office market, according to the report.

Fresh leases made up 77 percent of total leasing activity in H1 2025, a trend that has consistently remained above the 70 percent threshold since late 2022. Notably, pre-commitments increased to 10 percent, indicating a supply shortage in key markets and growing urgency among occupiers.

Global Capability Centres remained a primary demand driver, accounting for 24 percent of the total leasing activity in the quarter at 5.1 MSF. Bengaluru (1.6 MSF) and Pune (1.6 MSF) contributed to 63 percent of this demand.

H1 2025 set a new record for GCC leasing in the first half of any year, with 11.4 MSF transacted, marking a 3 percent year-on-year increase. The IT-BPM sector held the largest share at 40 percent, followed by E&M GCCs at 36 percent, the report concluded.