India's Office Market Sees 15% Yearly Growth in Q1 2025, Driven by GCCs and Tech Firms
3 APR 2025 / 04 min read
India's office market witnessed a robust 15% year-on-year growth in Q1 2025, with gross absorption reaching 15.9 million square feet across the top seven markets, according to a report by Colliers.
The growth was largely driven by Global Capability Centers (GCCs) and technology firms, which accounted for a significant share of office space demand. Bengaluru and Delhi NCR led the leasing activity, contributing to nearly half of the total leasing and two-thirds of the new supply during the quarter.
"2025 has started on a positive note, with office leasing witnessing a commendable 15% year-on-year growth," said Arpit Mehrotra, Managing Director, Office Services, India, Colliers. "Key markets are seeing strong Grade A space uptake, driven by corporate expansions, rising investments in commercial real estate, and promising domestic growth prospects."
The report noted that technology firms drove conventional office space demand, accounting for 28% of the total demand during the quarter. BFSI and Engineering & Manufacturing sectors also saw healthy demand, accounting for 36% of the total space uptake.
Flex space leasing remained buoyant, witnessing a 22%
year-on-year growth, driven by enterprise-level offerings, plug & play facilities, and customizable solutions.
As demand continues to outpace new supply, average
office rentals increased annually by 8% during Q1 2025. Vacancy levels dropped by 120 basis points on an annual basis to 16.2%.
The report highlights the growing importance of GCCs in driving demand for commercial real estate in India. With the country's office market expected to continue its upward trajectory, GCCs are likely to play a key role in shaping the market's growth.
