India's office leasing surges to all-time high in Q1 2025

Global occupiers continued to remain the mainstay of leasing activity, nevertheless, driven primarily by GCCs, according to the report by global real estate firm JLL.

On a year-on-year basis, gross leasing for the top seven cities was up 28.4 per cent at the pan-India level and higher for all cities, barring Chennai, the report states.

Bengaluru was the leader for the fourth straight quarter in terms of leasing activity with accounting for 21.9 per cent, followed by Delhi-NCR with 21.6 per cent.

Leasing by domestic occupiers was year-over-year higher in Bengaluru, Hyderabad, Mumbai and Pune.

Flex was the dominant domestic occupier segment in Bengaluru and Pune accounting for 70 per cent and 61.8 per cent, respectively in the domestic occupier space take-up. BFSI was the biggest contributor in Mumbai while Tech was the major contributor in Hyderabad in the domestic occupiers’ leasing activity, the report said.

“The Indian office market has demonstrated remarkable resilience and growth in Q1 2025, underpinned by the strongest-ever performance by domestic occupiers which was driven by flex and third-party tech firms,” said Samantak Das, chief economist for India, JLL.

A strong performance by BFSI, along with the aforementioned ones, has propelled net absorption to 12.78 million sq ft in Q1, up 54 per cent year-on-year and further highlighting the expansion-driven demand in the India office market,” Das added.

The dominance of global occupiers, particularly GCC set-ups which comprised 64.1 per cent of international leasing, reflects India's growing appeal as a strategic location for multinational operations.

“The market's robustness is further evidenced by a significant drop in vacancy rates to a four-year low of 15.7 per cent, with prime locations experiencing single-digit vacancies. Tight vacancy levels in core markets coupled with steady demand, signal a bullish outlook for India's commercial real estate sector,” explained Rahul Arora, Senior Managing Director at JLL.