New Delhi– India’s office real estate market continued its positive momentum in the first quarter of 2025, driven by strong occupier demand and limited new supply, pushing overall vacancy rates lower for the seventh straight quarter, according to a report released Wednesday.
The vacancy rate across India’s top eight office markets fell to 15.7 percent in Q1 2025, a drop of 55 basis points from 16.25 percent in Q4 2024 and a significant decline of 275 basis points from 18.45 percent in Q2 2023, according to Cushman & Wakefield’s Q1 2025 Office Market Report.
The total new office supply in Q1 2025 reached 10.7 million square feet (MSF), with Bengaluru (3.28 MSF), Pune (3.21 MSF), and Delhi-NCR (2.71 MSF) contributing a combined 86 percent of that figure. Other markets such as Hyderabad (1.32 MSF) and Mumbai (0.18 MSF) saw modest new supply, while Chennai, Kolkata, and Ahmedabad recorded no new completions, leading to tighter vacancy rates and rising rents in those cities.
Leasing activity remained robust, with gross leasing volume (GLV) across the top eight cities hitting 20.3 MSF in Q1, a 5 percent year-on-year increase and consistent with the two-year average of 20 MSF per quarter. Fresh leasing accounted for nearly 80 percent of the activity for the third consecutive quarter, highlighting continued occupier expansion.
GLV captures all leasing activity, including new leases, renewals, and pre-leasing, serving as a key indicator of overall market health.
“The momentum in India’s office sector carried into Q1 2025, supported by steady large deal closures and strong fresh leasing,” said Anshul Jain, Chief Executive, India, SEA, and APAC Tenant Representation at Cushman & Wakefield.
“The ongoing expansion by global occupiers reflects sustained confidence in India as a strategic business destination,” he added.
India’s role as a global hub for technology, R&D, and innovation continues to grow. The Global Capability Center (GCC) segment now accounts for over 30 percent of gross leasing, signaling strong demand from multinational corporations. Jain expects this trajectory to continue, driven by greenfield investments and expansion mandates.
Additionally, domestic economic factors like easing inflation and anticipated interest rate cuts are expected to further bolster occupier activity in the coming quarters. (Source: IANS)
