According to Colliers, Delhi NCR and Bengaluru led India’s office leasing surge in Q1 2025, contributing to a 15% YoY growth. Strong demand, especially from tech, BFSI, and manufacturing sectors, outpaced supply, driving rentals up 8%. Flex space leasing grew 22%, signalling continued commercial real estate market expansion.
According to a report by real estate and investment firm Colliers, Delhi NCR and Bengaluru have emerged as the frontrunners in India’s office leasing market, driving nearly half of all activity in Q1 2025. Leasing across the top seven markets reached 15.9 million square feet, marking a 15% year-on-year (YoY) increase.
“2025 has started on a positive note, with office leasing witnessing a commendable 15 per cent year-on-year growth,” said Arpit Mehrotra, Managing Director, Office Services, India, Colliers. He attributed the surge to corporate expansions, increased investments in commercial real estate, and robust domestic growth prospects. The momentum is expected to persist, with the technology, engineering, manufacturing, and BFSI sectors leading the expansion.
Chennai recorded an impressive 93% YoY growth in leasing activity, reaching 2.9 million square feet, driven primarily by technology firms. Meanwhile, new office supply in Q1 2025 stood at 9.9 million square feet, with Bengaluru and Delhi NCR accounting for two-thirds of the total. Delhi NCR and Pune saw significant increases in new completions, bucking the trend of supply declines in most markets.
Demand has outpaced new supply in several cities, leading to an 8% annual rise in average office rentals. High-demand micro-markets such as BKC and Andheri East in Mumbai, SBD in Hyderabad, and NH 48 & Golf Course Extension Road in Delhi NCR saw the sharpest rental increases. Additionally, national vacancy levels dropped by 120 basis points YoY to 16.2%.
Technology firms remained the dominant occupiers, leasing 4.4 million square feet of conventional office space—28% of the total demand. BFSI and engineering & manufacturing sectors also showed strong activity, accounting for 36% of conventional office space uptake combined. Flex space leasing continued its upward trend, recording a 22% YoY growth at 2.2 million square feet, highlighting its growing relevance in the market.
With a strong start to the year, the Indian office leasing sector is poised for continued growth, supported by policy measures and corporate expansion plans. As demand strengthens, the market is expected to remain dynamic, with key cities leading the charge.
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