Key Points

However, Pune and Delhi-NCR saw vacancy rates increase by over 100 basis points quarter-on-quarter, driven by a surge in new office completions in these markets, according to a recent report by real estate consultancy firm Colliers.

The report further noted that average rental rates continued to rise across major cities, supported by strong demand-supply dynamics, which indicated sustained confidence among occupiers.

Leasing activity across India's top seven office markets has remained upbeat in the first three quarters of 2025. Space uptake for the year has reached 50.9 million sq ft, marking an 8 per cent YoY growth. However, on a quarterly basis, it dipped marginally to 17.2 million sq. ft. in Q3 2025, the report said.

While Bengaluru continued to drive overall transaction volumes in the third quarter, Pune, Mumbai and Chennai, particularly witnessed high demand traction. The three cities cumulatively accounted for more than half of the quarterly Grade A office space uptake. Notably, each of the three cities saw a YoY demand growth of at least 40 per cent in Q3 2025.

In terms of 9-month space uptake, Bengaluru retained its dominance with 14 million sq. ft. of leasing and 27 per cent share in the overall India office space demand.

Interestingly, Grade A space uptake has been more evenly balanced in Chennai, Delhi NCR, Hyderabad, Mumbai and Pune.

Each of these five cities have already witnessed leasing activity to the tune of 6-8 million square feet in 2025, underscoring the momentum across most major cities of the country.

"This steady momentum has been fueled by a surge in space uptake by GCCs and continued traction in leasing activity from domestic firms," said Arpit Mehrotra, Managing Director, Office services, India, Colliers.

"Going forward, although occupiers are likely to carefully evaluate evolving scenarios, global technology firms will continue to bolster Grade A space uptake and play a pivotal role in driving the office space demand close to 70 million sq. ft. by the end of the year," Mehrotra said.

New supply across the top seven office markets remained robust in Q3 2025, with 16.6 million square feet of completions, marking a 15 per cent YoY increase. Pune led the momentum with a nearly 4X surge in quarterly completions at 4.6 million square feet, followed by Bengaluru and Delhi-NCR.

New supply reached 41.4 million square feet in the first 9 months of 2025, with Bengaluru and Pune together contributing 54 per cent of the new supply. Meanwhile, new completions have been relatively lower in Hyderabad, Mumbai and Kolkata as compared to the corresponding period in 2024.

Conventional leasing in the first nine months of 2025 stood at 41.7 million sq. ft., led primarily by the Technology and BFSI sectors. Technology firms alone leased over 15 million sq. ft., a robust 24 per cent YoY growth, largely driven by the expansion of Global Capability Centres (GCCs).

During this 9-month period, flex space leasing reached close to the all-time high, at 9.2 million square feet, reflecting the increasing trend of dynamic real estate requirements.

On a quarterly basis, conventional spaces accounted for 84 per cent of the 17.2 million square feet of Grade A office space uptake in Q3 2025. Flex activity, meanwhile, also remained strong in the third quarter with 2.7 million square feet of space uptake.

Meanwhile, average rentals continued their upward trajectory across major markets, supported by robust demand-supply dynamics. However, the India office market, with its wide rental spectrum across cities and micro markets, continues to present an attractive proposition for global players to consolidate their operations in the country.

- ANI