Office Leasing Set to Soar in 2025

According to real estate consultancy Colliers, India’s office space market is on track for significant growth, with gross leasing across the top six cities expected to reach 65-70 million square feet in 2025. The demand from engineering and manufacturing, BFSI firms, and flexible space operators is anticipated to rise by 10-15% next year, reflecting continued business optimism and sectoral expansion.

Bengaluru to Lead, While Other Cities Gain Momentum

Bengaluru is expected to account for nearly one-third of the total office space demand in 2025, primarily driven by GCCs, engineering and manufacturing firms, and flex space operators. Hyderabad and Delhi NCR are also set to see a surge in activity, with each market projected to witness 10-15 million sq ft of leasing activity, marking a 5-10% increase from the previous year.

Meanwhile, Mumbai, Chennai, and Pune will remain attractive for BFSI firms and engineering & manufacturing occupiers, with each city expected to record 5-10 million sq ft of Grade A office space demand. “The three cities are likely to witness 5-10 million sq ft of Grade A office space demand each in 2025,” said Arpit Mehrotra, Managing Director, Office Services, Colliers India.

GCCs and Flex Spaces Drive Leasing Growth

Global Capability Centers (GCCs) expansion remains a major catalyst for office demand. GCC leasing saw a 41% YoY increase in 2024, reaching 25.7 million sq ft, and is expected to touch 30 million sq ft in 2025—accounting for 40% of total leasing activity.

Bengaluru and Hyderabad will continue to be top destinations for knowledge and innovation-driven GCCs, with US-based firms expected to contribute 70% of total GCC demand, particularly in the Technology, BFSI, and Engineering & Manufacturing sectors.

“US-based companies are likely to drive GCC expansion across most markets and contribute around 70 per cent of the GCC demand in 2025,” the report noted.

Flex space operators are emerging as a key segment, expected to contribute nearly 20% of total leasing activity in 2025, reflecting the growing preference for hybrid workspaces and agile office solutions.

Sustainability and REITs Reshape Commercial Real Estate

Growing Focus on Sustainable Office Spaces

With developers shifting towards an occupier-driven landscape, the emphasis on energy efficiency, sustainable materials, and green-certified buildings is increasing. Around 60-65 million sq ft of new office supply is anticipated in 2025, with many developments integrating low-carbon construction practices.

Rise of REITs in India

At the same time, REITs (Real Estate Investment Trusts) in India are gaining momentum due to rising retail investor participation and a favourable regulatory environment. This trend encourages developers to curate high-quality real estate portfolios while accelerating India’s transition toward a low-carbon, sustainable economy.

The Future of Green Real Estate

“Increasing adoption of sustainable elements and low-carbon construction materials in commercial real estate can accelerate long-term green economy transition,” the report highlighted.

As India’s office market continues to evolve, business optimism, GCC expansion, and sustainability initiatives will be the key drivers shaping the country’s next phase of commercial real estate.