India’s Office Leasing Hits Record High In Q1 2025; Driven By Domestic Demand

India’s office space leasing surged to its highest level ever in the first quarter of 2025, reflecting strong domestic and global demand, especially from GCCs and flex space operators.

Office Leasing Reaches 19.46 Million Sq Ft

India recorded an all-time high office leasing volume of 19.46 million square feet in the January-March quarter of 2025, according to a report released on Wednesday by global real estate firm JLL.

Domestic companies contributed significantly, leasing a record 8.82 million sq ft during the quarter.

Global Occupiers Lead; Domestic Players Make Historic Gains

While global occupiers, particularly global capability centers (GCCs), continued to dominate leasing activity, domestic firms demonstrated unprecedented growth.

“The Indian office market has demonstrated remarkable resilience and growth in Q1 2025, underpinned by the strongest-ever performance by domestic occupiers,” said Samantak Das, Chief Economist for India at JLL.

Flex space operators and third-party tech firms drove much of the domestic demand, especially in cities like Bengaluru and Pune, where flex operators accounted for 70% and 61.8% of the domestic leasing, respectively.

In Mumbai, the BFSI sector led leasing by domestic companies, while in Hyderabad, tech firms took the lead.

Bengaluru And Delhi-NCR Lead City-Wise Leasing Activity

Bengaluru retained its top spot in office leasing for the fourth consecutive quarter, accounting for 21.9% of total leasing.

Delhi-NCR followed closely with 21.6%. Year-on-year, gross leasing rose 28.4% across India’s top seven cities, with all cities recording growth except Chennai.

Domestic leasing saw significant year-on-year growth in Bengaluru, Hyderabad, Mumbai, and Pune, reflecting expanding business activity in these urban hubs.

Net Absorption Jumps 54% YoY

Driven by strong demand across sectors, net office space absorption climbed to 12.78 million sq ft in Q1 2025, marking a 54% year-on-year increase.

“A strong performance by BFSI, along with flex and tech firms, propelled net absorption and emphasized the expansion-led demand in the Indian office market,” Das noted.

Vacancy Rates Drop To Four-Year Low

India’s commercial real estate market tightened significantly, with vacancy rates falling to a four-year low of 15.7%.

Prime office locations even saw single-digit vacancy levels, indicating strong demand and limited supply in core markets.

“The market’s robustness is further evidenced by tight vacancy levels and steady demand, signaling a bullish outlook for India’s commercial real estate sector,” said Rahul Arora, Senior Managing Director at JLL.

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