India’s office real estate market is set to grow steadily, driven by 15–20 high-activity micro markets across top cities. According to Colliers, these zones will account for over 80% of future demand and supply, led by expanding infrastructure, emerging flex space needs, and continued interest from global capability centres.
Micro Markets at the Centre of India’s Office Boom
India’s commercial real estate future is shaped by high-activity micro office markets, which are projected to drive over 80% of total office space demand and new supply in the coming years. According to a new report by Colliers, these markets are expected to witness at least 1 million sq ft of average annual leasing and development activity.
Spread across the top seven Indian cities, these zones include four in Bengaluru, three each in Delhi-NCR and Pune, two each in Chennai and Hyderabad, and one in Mumbai. These micro markets are primarily located in secondary and peripheral business districts (SBDs and PBDs)—areas experiencing rapid growth due to infrastructure upgrades and urban expansion.
Strategic Growth Anchored in Affordability
“India’s office market is poised for steady, strong growth, led by 15–20 high-activity micro markets,” said Arpit Mehrotra, Managing Director, Office Services, India, Colliers. He added that while some are already established hubs, several emerging micro markets are expected to scale significantly in the coming years.
Interestingly, India continues to offer rental arbitrage, with more than half of future Grade A office demand expected in markets with sub- or near-dollar rentals—a key factor attracting local and international occupiers.
Flex Space and GCCs Concentrated in Top Zones
Flexible workspace operators and Global Capability Centres (GCCs) are pivotal in shaping these micro markets. Of the 38 million sq ft of flex leasing since 2020 across major Indian cities, 59% took place in just 10 top-performing micro markets. Notably, SBD-Hyderabad, ORR-Bengaluru, and Baner-Balewadi in Pune alone accounted for around one-third of this uptake.
In terms of GCC activity, nearly 70 million sq ft of demand over the past five years was concentrated in these same micro markets, making up 73% of India’s total GCC leasing. This reaffirms their growing relevance in the evolving workplace ecosystem.
REITs and Rentals Reflect Market Maturity
The report also points out that 56% of India’s REIT-worthy office stock—totalling 488 million sq ft—is in the top 10 micro markets. This concentration signals not only robust institutional interest but also confidence in the long-term viability of these zones.
While rental appreciation has been observed nationwide post-COVID, Mumbai and Delhi-NCR micro markets continue to command the highest average rents, reflecting their maturity and prime positioning within the commercial office hierarchy.
Looking Ahead
With city peripheries transforming into future business hubs and flex space operators scaling aggressively, India’s high-activity micro markets are poised to become the backbone of the country’s office real estate growth. These pockets represent high-potential opportunities for investors, developers, and occupiers in an increasingly dynamic and diversified landscape.
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