Office space leasing is projected to fall marginally by 1% to 172 lakh sq ft in the July-September 2025 quarter across seven major Indian cities, driven largely by declines in Bengaluru, Hyderabad, and Delhi-NCR, according to Colliers India. However, Mumbai, Pune, and Chennai show robust growth in office leasing demand during the same period.
Leasing Trends Across Cities
- Bengaluru’s office leasing is expected to drop 25% to 47 lakh sq ft from 63 lakh sq ft a year ago.
- Hyderabad will likely see a steep 48% decline to 15 lakh sq ft from 29 lakh sq ft.
- Delhi-NCR’s leasing demand is also down to 16 lakh sq ft from 24 lakh sq ft previously.
- In contrast, Chennai’s office demand surges 86% to 26 lakh sq ft from 14 lakh sq ft.
- Mumbai experiences a 76% increase to 30 lakh sq ft from 17 lakh sq ft.
- Pune’s leasing activities grow 42%, reaching 37 lakh sq ft from 26 lakh sq ft.
- Kolkata’s demand remains flat at 1 lakh sq ft for the quarter.
Overall Market Outlook
Despite the modest decline in Q3 leasing, the gross office leasing volume for January-September 2025 has risen 8% year-on-year, reaching 509 lakh sq ft compared to 473 lakh sq ft in the same period last year. This resilience is notable amid global economic challenges and trade uncertainties.
Role of Global Capability Centres (GCCs)
Global Capability Centres have been key demand drivers in 2025, leasing nearly 20 million sq ft across the top seven cities, accounting for approximately 40% of the total office space demand during the year.
Flex Insights Take
The Indian office market demonstrates enduring strength and adaptability, with demand dynamics varying sharply by city. The dip in leasing in major tech and IT hubs like Bengaluru, Hyderabad, and Delhi-NCR may signal shifting preferences or cyclical market adjustments. Meanwhile, Mumbai, Pune, and Chennai’s growth highlights the diversification of corporate activity and rising investor confidence in these markets. The steady contribution of GCCs underlines the importance of the IT-BPM sector as a foundation of office space demand. Overall, the market’s ability to surpass 50 million sq ft absorption in nine months despite external headwinds reflects solid fundamentals and a maturing ecosystem of occupiers and investors.
