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Time of India
3 days ago
- Business
- Time of India
India office market delivers resilient growth in H1 2025 amid flex boom and tech revival
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. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 점점 번지는 기미 잡티, 더 이상 헛돈 쓰지말고 이렇게 해보세요 두아이연구원 Undo 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. Live Events '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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Business Standard
3 days ago
- Business
- Business Standard
Grade A office leasing in Q2 CY25 up 11% across top 7 cities: Colliers
Gross grade A office leasing across the top seven Indian cities in Q2 CY25 grew by 11 per cent year on year (YoY) to 17.8 million square feet (msf), according to a report by Colliers. The growth is said to be due to rising occupier confidence, particularly from flex space operators and firms across sectors like technology, BFSI, and engineering and manufacturing, despite ongoing global uncertainties. In Q2 CY25, five out of the top seven office markets in India witnessed growth in grade A space uptake on an annual basis. Bengaluru led leasing activity with a 27 per cent share at 4.8 msf, but growth remained flat. Hyderabad, Mumbai, and Chennai each recorded over 2.5 msf of leasing in the quarter. However, space uptake in Mumbai declined by 20 per cent YoY. "The robust performance in the first half—with demand reaching 33.7 msf, a 13 per cent year-on-year increase—signals sustained occupier confidence and strong market fundamentals. Backed by a 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 msf at least by the end of the year," said Arpit Mehrotra, Managing Director, Office Services, India, Colliers. Gross absorption does not include lease renewals, pre-commitments and deals where only a letter of intent has been signed. Meanwhile, overall supply during the quarter grew by 11 per cent YoY to 14.9 msf. However, cities including Delhi NCR, Mumbai, Kolkata, and Hyderabad recorded a decline on a YoY basis. Of the total 17.8 msf of leasing in Q2 CY25, leasing by flex space operators stood at 4.3 msf. Conventional leasing remained at 13.5 msf, led primarily by the technology and BFSI sectors. Technology firms alone accounted for 6.4 msf space uptake—a 42 per cent YoY growth, driven largely by Global Capability Centre (GCC) expansion. Amal Mishra, Founder and Chief Executive Officer, Urban Vault, said, 'Despite the global uncertainty, the demand for office space continues to gain momentum, driven by competitive operating costs and the growing availability of build-to-suit facilities. This rising demand is not limited to start-ups or small enterprises; large corporations and GCCs are also actively seeking flexible and customised workspaces.' Additionally, the overall vacancy level remained almost stable at 16.2 per cent amid relocations and churns. However, Pune and Hyderabad, with significant completions in Q2 CY25, were at relatively higher vacancy levels.
Business Standard
19-06-2025
- Business
- Business Standard
Top 10 micro markets to drive 80% of India's office space growth: Colliers
High-activity micro markets across the top seven Indian cities are likely to witness at least 1 million square feet (msf) of average annual office demand and supply and collectively drive more than 80 per cent of the demand and new supply in the next few years, according to a report by Colliers. Of all the micro markets, four high-activity micro markets are in Bengaluru, three each are in Delhi NCR and Pune, two each are in Chennai and Hyderabad, and one in Mumbai. These high-activity micro markets are spread across secondary and peripheral business districts (SBDs and PBDs). These micro markets are expected to continue to drive India's office market over the next few years amidst city expansions, ongoing infrastructure developments, and evolving work models. While the existing high-activity micro markets will continue to grow, other emerging micro markets too are expected to increasingly complement the larger micro markets. 'India's office market is poised for steady strong growth, led by 15–20 high-activity micro markets. While some of these micro markets are already established commercial real estate hubs, emerging micro markets can potentially scale up and witness heightened traction in the upcoming years. Interestingly, India will continue to be strategically positioned in terms of rental arbitrage, with more than half of the Grade A demand expected in micro markets having sub or near-dollar rentals,' said Arpit Mehrotra, Managing Director, Office Services, India, Colliers. Of the total 38 msf of flex space leasing across the top seven Indian cities since 2020, 59 per cent corresponded to the top 10 micro markets. Within these, SBD-Hyderabad, ORR-Bengaluru, and Baner-Balewadi, Pune, cumulatively drove around one-third of the flex space uptake in India. Overall, the annual flex space demand in these top 10 micro markets has surged from 1.3 msf in 2020 to 7.3 msf in 2024 at a compound annual growth rate (CAGR) of 54 per cent. On the global capability centre (GCC) front, nearly 70 msf of GCC demand during the last five years has been concentrated in the top 10 micro markets, accounting for 73 per cent of the total GCC leasing in India. Micro markets such as ORR, Whitefield, SBD 1, and North in Bengaluru, SBD and Off SBD in Hyderabad, and OMR Zone 1 and MPR in Chennai collectively have accounted for two-thirds of the country's Grade A space uptake by GCCs since 2020. Although most micro markets in India have seen rental appreciation compared to pre-pandemic levels, select micro markets in Mumbai and Delhi NCR continue to lead in terms of average rentals. BKC, CBD, Lower Parel, Worli-Prabhadevi, Goregaon/JVLR, and Kalina in Mumbai, and CBD, Aerocity, Golf Course Road, and South Delhi in Delhi NCR feature prominently in the list of micro markets having the highest rentals in India. Almost 30 per cent of the office micro markets in India have sub-10 per cent vacancy levels, compared to the 16.2 per cent vacancy at the India level. 'Majority of these high-activity micro markets will continue to have potentially higher rental upside and are likely to lean towards landlords and developers. In addition to the preference for premium offerings, occupiers will increasingly prefer sustainable elements and green-certified office buildings,' said Vimal Nadar, National Director and Head of Research, Colliers India. Of the 488 msf of REIT-worthy office stock in India, 56 per cent is in the top 10 micro markets. Meanwhile, 275 msf of Grade A inventory (as of Q1 CY25) corresponding to 72 per cent of the overall stock in these micro markets is already under REITs or has the potential to be listed as future REITs. Key micro markets in Bengaluru (ORR and Whitefield) and Hyderabad (SBD and Off SBD) collectively hold 38 per cent of India's REIT-worthy office stock. These four micro markets cumulatively have more than 35 msf of office stock already under existing REITs.
Time of India
19-06-2025
- Business
- Time of India
India's top 15 high-activity micro markets drive 65% of office demand, 76% of new supply
Bengaluru : India's office real estate market is being driven by 15 high-activity micro markets , which together have accounted for two-thirds of the country's office demand and over three-fourths of new supply since 2020, according to a new report by Colliers titled 'India Office: Micro Market Insights.' Spread across major cities — including Bengaluru, Delhi NCR , Pune, Hyderabad, Chennai, and Mumbai — these micro markets are expected to each witness at least 1 million sq ft of average annual demand and new supply over the next few years. Their prominence marks a clear shift in how India's commercial real estate ecosystem is evolving, both in scale and investment potential. 'These 15 micro markets have become the backbone of India's Grade A office demand and are expected to remain the top destinations for occupiers and investors alike. In fact, annual demand and supply in each of these high activity micro markets is likely to be at least 2-3X times vis-à-vis average of othermarkets,' said Arpit Mehrotra, Managing Director, Office Services, Colliers India. Between 2020 and Q1 2025, these 15 micro markets accounted for 166.8 million sq ft of office space absorption out of the total 255.1 million sq ft across top Indian cities. At the same time, 172.2 million sq ft of new supply was added in these markets — amounting to 76% of the nationwide figure. The high-activity micro markets include four in Bengaluru, three each in Delhi NCR and Pune, two each in Hyderabad and Chennai, and one in Mumbai. Notably, most of them fall within secondary and peripheral business districts (SBDs and PBDs), which are increasingly favored by Global Capability Centers (GCCs) and flex space operators. Leading micro markets have also seen a major concentration of GCC and flexible workspace demand. Since 2020, 73% of GCC leasing — around 70 million sq ft — has been in the top 10 micro markets, with ORR, Whitefield, SBD 1 and North in Bengaluru, SBD & Off SBD in Hyderabad and OMR Zone 1 & MPR in Chennai, accounting for the lion's share. Flex space operators have similarly gravitated toward select commercial real esate hubs. Of the total 38 million sq ft of flex leasing in India since 2020, 59% took place in the top 10 micro markets. The segment has grown at a CAGR of 54%, with SBD Hyderabad, ORR Bengaluru, and Baner-Balewadi Pune leading flex space absorption. While the overall vacancy in India's Grade A office stock stands at 16.2%, nearly 30% of micro markets are operating at sub-10% vacancy levels. High-demand markets like CBD Bengaluru, Guindy in Chennai, and Delhi NCR's Aerocity , Cybercity and MG Road continue to show resilience with tight occupancies and rising rentals. Micro markets in Mumbai and Delhi NCR dominate the list of most expensive locations, with Andheri East, BKC, CBD ,Lower Parel, Worli-Parabhadevi, Goregaon/JVLR and Kalina in Mumbai, and Golf Course Road, South Delhi, Aerocity and CBD in NCR among the top. 'Markets with significant rental appreciation post-2020 are also those with the highest demand and supply. This trend is expected to continue in favor of landlords, particularly in sustainable, green-certified office buildings,' said Vimal Nadar, Head of Research, Colliers India. The report also notes that India has 488 million sq ft of REIT-worthy Grade A office space, of which 56% lies within the top 10 micro markets. Impressively, 72% of the stock in these micro markets is either already listed under REITs or has the potential to be listed. Key markets in Bengaluru and Hyderabad alone account for 38% of this REIT-qualified inventory. With improving infrastructure, emerging locations are also gaining momentum and are likely to complement the established hubs. India's competitive rentals — with nearly 60% of active markets offering near- or sub-dollar rates — make it an attractive destination for global occupiers seeking consolidation and cost arbitrage.
Hans India
19-06-2025
- Business
- Hans India
India's high-activity micro markets to drive 80 pc of office demand and supply in few years
Bengaluru: High-activity micro office markets in India are likely to witness at least 1 million square feet of average annual demand and supply, and collectively drive more than 80 per cent of the office space demand and new supply in the next few years, a report showed on Thursday. High-activity micro markets across the top seven cities of the country have been witnessing consistently high demand and supply since 2020. Of these, four high-activity micro markets are in Bengaluru, three each in Delhi-NCR and Pune, two each in Chennai and Hyderabad, and one in Mumbai, according to Colliers data. These micro markets are spread across secondary and peripheral business districts and will continue to drive India office market over the next few years amid city expansions, ongoing infrastructure developments and evolving work models. 'India's office market is poised for a steady strong growth, led by 15-20 high-activity micro markets. While some of these micro markets are already established commercial real estate hubs, emerging micro markets can potentially scale up and witness heightened traction in the upcoming years,' said Arpit Mehrotra, Managing Director, Office services, India, Colliers. Interestingly, India will continue to be strategically positioned in terms of rental arbitrage, with more than half of the Grade A demand expected in micro markets having sub or near dollar rentals, Mehrotra added. Of the total 38 million sq ft of flex space leasing across the top seven Indian cities since 2020, 59 per cent corresponded to the top 10 micro markets. Within these, SBD-Hyderabad, ORR-Bengaluru and Baner-Balewadi, Pune cumulatively drove around one-third of the flex space uptake in India. On the GCC front, nearly 70 million sq ft of GCC demand during the last five years has been concentrated in the top 10 micro markets, accounting for 73 per cent of the total GCC leasing in India, said the report. Although most micro markets in India have seen a rental appreciation compared to pre-pandemic levels, select micro markets in Mumbai and Delhi-NCR continue to lead in terms of average rentals. Of the 488 million sq ft of REIT-worthy office stock in India, 56 per cent is in the top 10 micro markets.
