India's Office Leasing Surges 15% to 15.9 Million Square Feet in Q1 2025
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Synopsis
In Q1 2025, India's office leasing saw a robust 15% YoY increase, reaching 15.9 million square feet. Major cities like Bengaluru and Delhi-NCR led the demand, with significant contributions from the tech sector, indicating a positive trend for commercial real estate.
Key Takeaways
- 15.9 million square feet of office space leased in Q1 2025.
- 15% YoY increase in office leasing across major markets.
- Bengaluru and Delhi-NCR drove half of total leasing.
- Technology sector accounted for 28% of demand.
- Average office rents rose by 8%.
Bengaluru, March 27 (NationPress) Office leasing in the top seven markets of India demonstrated robust growth in Q1 2025, reaching 15.9 million square feet, marking a 15 percent year-on-year (YoY) increase, according to a recent report released on Thursday.
The overall new supply stood at 9.9 million square feet during Q1 2025, nearly matching the figures of the same timeframe last year. Notably, Bengaluru and Delhi-NCR accounted for approximately half of the total leasing and two-thirds of the new supply in this quarter.
In addition, Delhi NCR experienced its highest quarterly leasing in over ten quarters, while Chennai recorded an impressive 93 percent YoY surge at 2.9 million square feet, largely driven by the demand from technology companies, as per the findings from Colliers.
“Significant markets are witnessing a strong uptake of Grade A office spaces, fueled by corporate expansions and increasing investments in commercial real estate, amidst positive domestic growth indicators,” stated Arpit Mehrotra, Managing Director of Office Services, India, at Colliers.
“We foresee demand momentum accelerating throughout 2025, driven by the expansion plans of leading firms in the Technology, Engineering, Manufacturing, and BFSI sectors,” he added.
Moreover, supported by policy-level initiatives in major states, the long-term demand for GCCs is expected to remain robust in most tier 1 and select tier 2 cities across the nation.
Both Delhi-NCR and Pune experienced significant growth in new completions compared to Q1 2024. Remarkably, nearly 90 percent of the new supply in Q1 2025 was concentrated in three urban centers – Bengaluru, Delhi-NCR, and Pune.
As demand surpasses new supply in most regions, average office rents have risen by 8 percent annually in Q1.
Out of the 15.9 million square feet of Grade A office space demand in Q1 2025, 86 percent originated from conventional workspaces. Meanwhile, the leasing of flex spaces, totaling 2.2 million square feet, saw a 22 percent YoY growth.
The technology sector remained a key driver of office space demand, leasing 4.4 million square feet of conventional office space during Q1, making up 28 percent of the total demand for the quarter.
“As a result, flex spaces are likely to gain further traction, with their share in occupiers' portfolios possibly reaching 12-15 percent in the upcoming years,” remarked Vimal Nadar, Senior Director and Head of Research at Colliers India.
