NEW DELHI: India’s commercial office market has achieved absorption of 66.4 million sq ft in 2024, marking 14% year-on-year growth. The market is projected to reach 65-70 million sq ft in 2025, according to a new report by FICCI and Colliers India.
Vacancy levels are projected to decline to 15-16% in 2025. Average rental values are forecast to reach Rs 100-110 per sq ft per month.
The shift from a supply-led to an occupier-driven market has been cemented by three consecutive years of leasing volumes exceeding 50 million sq ft. Bengaluru led with its highest-ever absorption of 21.7 million sq ft in 2024, while Hyderabad registered the strongest growth at 55%.
Technology sector’s traditional dominance has notably declined from 40-50% to 25% of total leasing, as engineering and manufacturing firms, banking and financial services, and flexible workspace operators collectively emerge to account for over half of Grade A office uptake.
Global Capability Centres (GCCs) have emerged as a major demand driver, with leasing surging 41% year-on-year to 25.7 million sq ft in 2024. Arpit Mehrotra, managing director- Office Services, Colliers India said, Bengaluru captured 47% of GCC leasing, while Mumbai witnessed a remarkable fourfold increase in GCC uptake compared to 2023.
“Office leasing is expected to grow another 8-10% in FY26, fueled by demand from GCCs and financial services sector,” said Raj Menda, chairman, FICCI Committee on Urban Development.
Over 70% of leasing now concentrated in green-certified buildings, expected to reach 80-85% in 2025. “Nearly 80% of new supply over the next 2-3 years will be green certified,” added Menda.
“The sector needs execution build-up and brilliant talent, including both white-collar and blue-collar jobs,” Gaurav Pandey, Co-Chairman, FICCI Committee on Urban Development added, emphasising that developer focus on labour strategy and talent management would be crucial for sustained growth.
On the investment front, institutional inflows reached USD 4.7 billion in the first nine months of 2024, with over 60 per cent directed towards industrial, warehousing and residential assets.
Sriram Khattar, vice chairman & managing director- Rental Business, DLF, said, “GCCs, technology companies and managed office space players are providing strong impetus. Companies which can offer Grade A++ properties, scalability, sustainable and safety norms are being preferred.”
