India’s office market performance in H1 2025 paints a compelling picture of resilience, adaptability, and structural transformation. Leasing activity remained healthy across most metros, new supply was strategically delivered, and the flex space segment continued its rapid scale-up.
As India remains a magnet for global and domestic capital and companies increasingly adopt agile workplace models, the momentum is likely to carry forward into the second half of the year.
Developers and occupiers are becoming more strategic in their decisions, driven by location intelligence, evolving workforce needs, and a strong focus on operational efficiency. These shifts are resulting in a more balanced, forward-looking office market anchored by flexibility, sustainability, and technology.
Gross absorption across the top seven Indian cities touched 33.7 million sq ft in H1 2025, registering an 13% year-on-year increase. The second quarter alone contributed 17.8 million sq ft, up 11% year-on-year and 12% quarter-on-quarter. Hyderabad, Pune, and Kolkata led this growth, reflecting a diversification of demand beyond —the traditional office strongholds.
According to Arpit Mehrotra, Managing Director, Office Services, India, Colliers, the market’s robust performance underscores sustained occupier confidence and solid fundamentals, with total office demand expected to cross 65–70 million sq ft by the end of the year.
“The fact that five of the seven major cities recorded over 2.0 million square feet of leasing each in a single quarter highlights the depth and vibrancy of the India office market. Backed by diversifying occupier base, a steady supply pipeline and growing investor appetite, 2025 is shaping up to be another impressive year for commercial real estate in India. Overall, office space demand looks well placed to reach 65-70 million square feet at least by the end of the year," said Arpit Mehrotra, Managing Director, Office Services, India, Colliers.
According to the report, Bengaluru led all markets with 9.3 million sq ft of leasing in H1 2025, accounting for 28% of national activity. It was followed by Delhi-NCR with 5.5 million sq ft, Mumbai at 5.0 million sq ft, Hyderabad at 4.9 million sq ft, and Chennai also at 5.5 million sq ft. Chennai and Pune emerged as the fastest-growing markets, with year-on-year growth rates of 57% and 56% respectively, driven largely by increased interest from the technology, manufacturing, and flex segments. In contrast, Hyderabad and Mumbai experienced marginal declines of 11% and 7%, which appear to reflect short-term demand fluctuations rather than structural slowdowns,” it said.
The technology sector retained its status as the primary demand driver, contributing 6.4 million sq ft of leasing in Q2 2025 alone—47% of total conventional leasing and a 42% rise compared to Q2 2024. Some large deals included Tata Consultancy Services leasing over 1 million sq ft in Hyderabad and Applied Materials taking up 835,000 sq ft in Bengaluru. At the same time, sectors like engineering and manufacturing and BFSI experienced year-on-year declines of 47% and 14%, respectively, likely influenced by broader economic caution and selective expansion strategies. Healthcare leasing grew 25%.
Key deals during the first half of 2025 highlighted a continuing trend of consolidation among large occupiers and a clear flight to quality. Tenants are actively securing space in well-located, future-ready developments with strong infrastructure and sustainability credentials. Alongside the previously mentioned TCS and Applied Materials deals, Wipro leased 387,100 sq ft in Navi Mumbai’s Mindspace Business Parks, and Capgemini took 241,000 sq ft in Candor, Kolkata. These transactions reaffirm the growing importance of high-performance, tech-enabled campuses for large corporate occupiers.
Flex space operators significantly expanded their footprint in H1 2025, contributing 4.3 million sq ft of leasing in Q2 and capturing 24% of the total market share—up from 16% a year ago. This growing share reflects occupiers’ preference for agile, cost-effective, and scalable workspace models. Mumbai emerged as a frontrunner in this segment, with Smartworks leasing 411,200 sq ft in Navi Mumbai’s Intellion Park. Bengaluru and Chennai also witnessed strong demand, with company's like WorkEZ, Incuspaze, and Smartworks singing new spaces. Hyderabad continued to attract flex players, with Tablespace securing a 270,000 sq ft lease in the city’s Off SBD micromarket.
“We have seen sustained momentum in the flexible office segment, driven by occupiers seeking agility, cost efficiency, and talent-centric locations. Looking ahead, we expect demand to remain strong, especially from startups, GCCs, and enterprise clients adopting hybrid work models. Developers and operators who can offer scalable, tech-enabled, and experience-driven spaces will be best positioned to capture this evolving demand.” said BHIVE Workspace CEO Shesh Paplikar.
Vimal Nadar, National Director and Head of Research, Colliers India, observed that flex operators are not only fulfilling occupier demand but also shaping workplace strategies across industries. “Bengaluru accounted for one-third of Q2’s flex activity, but other cities like Mumbai, Hyderabad, and Chennai also saw significant uptake, reflecting the segment’s growing geographical spread and mainstream appeal,” he said.
On the supply side, new completions across India reached 14.9 million sq ft in Q2 2025, growing 11% year-on-year and a sharp 51% over Q1 2025. Chennai’s new supply shot up 117% compared to the same period last year, while Pune saw a massive 1000% jump, driven by backloaded project deliveries. Bengaluru remained a strong contributor, adding 4.1 million sq ft of new stock—a 105% increase from Q2 2024. Hyderabad’s recovery from a slow Q1 was also evident, with 3.5 million sq ft of new completions, up more than tenfold over the previous quarter. In contrast, Delhi-NCR and Mumbai saw supply dip significantly—down 59% and 60% respectively year-on-year—suggesting either construction delays or a more conservative release of inventory in these cities.
Experts believes that the India’s office market in H1 2025 is in the midst of a transition—one that’s being shaped by the resurgence of the technology sector, the rapid expansion of flex spaces, and a clear preference for high-quality, well-located assets. The rebound in leasing and supply activity points to a stabilizing environment, even as uncertainties remain in the global economy with workplace agility becoming central themes. The coming quarters will determine whether this momentum sustains, but the first half of the year has already laid a strong foundation for a more balanced, dynamic, and future-ready office market.
As India remains a magnet for global and domestic capital and companies increasingly adopt agile workplace models, the momentum is likely to carry forward into the second half of the year.
Developers and occupiers are becoming more strategic in their decisions, driven by location intelligence, evolving workforce needs, and a strong focus on operational efficiency. These shifts are resulting in a more balanced, forward-looking office market anchored by flexibility, sustainability, and technology.
Gross absorption across the top seven Indian cities touched 33.7 million sq ft in H1 2025, registering an 13% year-on-year increase. The second quarter alone contributed 17.8 million sq ft, up 11% year-on-year and 12% quarter-on-quarter. Hyderabad, Pune, and Kolkata led this growth, reflecting a diversification of demand beyond —the traditional office strongholds.
According to Arpit Mehrotra, Managing Director, Office Services, India, Colliers, the market’s robust performance underscores sustained occupier confidence and solid fundamentals, with total office demand expected to cross 65–70 million sq ft by the end of the year.
“The fact that five of the seven major cities recorded over 2.0 million square feet of leasing each in a single quarter highlights the depth and vibrancy of the India office market. Backed by diversifying occupier base, a steady supply pipeline and growing investor appetite, 2025 is shaping up to be another impressive year for commercial real estate in India. Overall, office space demand looks well placed to reach 65-70 million square feet at least by the end of the year," said Arpit Mehrotra, Managing Director, Office Services, India, Colliers.
According to the report, Bengaluru led all markets with 9.3 million sq ft of leasing in H1 2025, accounting for 28% of national activity. It was followed by Delhi-NCR with 5.5 million sq ft, Mumbai at 5.0 million sq ft, Hyderabad at 4.9 million sq ft, and Chennai also at 5.5 million sq ft. Chennai and Pune emerged as the fastest-growing markets, with year-on-year growth rates of 57% and 56% respectively, driven largely by increased interest from the technology, manufacturing, and flex segments. In contrast, Hyderabad and Mumbai experienced marginal declines of 11% and 7%, which appear to reflect short-term demand fluctuations rather than structural slowdowns,” it said.
The technology sector retained its status as the primary demand driver, contributing 6.4 million sq ft of leasing in Q2 2025 alone—47% of total conventional leasing and a 42% rise compared to Q2 2024. Some large deals included Tata Consultancy Services leasing over 1 million sq ft in Hyderabad and Applied Materials taking up 835,000 sq ft in Bengaluru. At the same time, sectors like engineering and manufacturing and BFSI experienced year-on-year declines of 47% and 14%, respectively, likely influenced by broader economic caution and selective expansion strategies. Healthcare leasing grew 25%.
Key deals during the first half of 2025 highlighted a continuing trend of consolidation among large occupiers and a clear flight to quality. Tenants are actively securing space in well-located, future-ready developments with strong infrastructure and sustainability credentials. Alongside the previously mentioned TCS and Applied Materials deals, Wipro leased 387,100 sq ft in Navi Mumbai’s Mindspace Business Parks, and Capgemini took 241,000 sq ft in Candor, Kolkata. These transactions reaffirm the growing importance of high-performance, tech-enabled campuses for large corporate occupiers.
Flex space operators significantly expanded their footprint in H1 2025, contributing 4.3 million sq ft of leasing in Q2 and capturing 24% of the total market share—up from 16% a year ago. This growing share reflects occupiers’ preference for agile, cost-effective, and scalable workspace models. Mumbai emerged as a frontrunner in this segment, with Smartworks leasing 411,200 sq ft in Navi Mumbai’s Intellion Park. Bengaluru and Chennai also witnessed strong demand, with company's like WorkEZ, Incuspaze, and Smartworks singing new spaces. Hyderabad continued to attract flex players, with Tablespace securing a 270,000 sq ft lease in the city’s Off SBD micromarket.
“We have seen sustained momentum in the flexible office segment, driven by occupiers seeking agility, cost efficiency, and talent-centric locations. Looking ahead, we expect demand to remain strong, especially from startups, GCCs, and enterprise clients adopting hybrid work models. Developers and operators who can offer scalable, tech-enabled, and experience-driven spaces will be best positioned to capture this evolving demand.” said BHIVE Workspace CEO Shesh Paplikar.
Vimal Nadar, National Director and Head of Research, Colliers India, observed that flex operators are not only fulfilling occupier demand but also shaping workplace strategies across industries. “Bengaluru accounted for one-third of Q2’s flex activity, but other cities like Mumbai, Hyderabad, and Chennai also saw significant uptake, reflecting the segment’s growing geographical spread and mainstream appeal,” he said.
On the supply side, new completions across India reached 14.9 million sq ft in Q2 2025, growing 11% year-on-year and a sharp 51% over Q1 2025. Chennai’s new supply shot up 117% compared to the same period last year, while Pune saw a massive 1000% jump, driven by backloaded project deliveries. Bengaluru remained a strong contributor, adding 4.1 million sq ft of new stock—a 105% increase from Q2 2024. Hyderabad’s recovery from a slow Q1 was also evident, with 3.5 million sq ft of new completions, up more than tenfold over the previous quarter. In contrast, Delhi-NCR and Mumbai saw supply dip significantly—down 59% and 60% respectively year-on-year—suggesting either construction delays or a more conservative release of inventory in these cities.
Experts believes that the India’s office market in H1 2025 is in the midst of a transition—one that’s being shaped by the resurgence of the technology sector, the rapid expansion of flex spaces, and a clear preference for high-quality, well-located assets. The rebound in leasing and supply activity points to a stabilizing environment, even as uncertainties remain in the global economy with workplace agility becoming central themes. The coming quarters will determine whether this momentum sustains, but the first half of the year has already laid a strong foundation for a more balanced, dynamic, and future-ready office market.
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