365Telugu.com online news,17thApril,2025:Theoffice space absorption across six major Indian cities stood at 18.9 million sq. ft. in Q1 2025reflecting a 10% year-on-year (YOY) growth,making it the strongest first-quarter performance since 2020according to Savills India, a global real estate advisory firm.During the same period, new supply was recorded as 8.6 mn sq. ft., registering a rise of 28% YOY. The overall vacancy rate remained stable at 15% by the end of the quarter, supported by sustained leasing momentum and measured supply additions.
In Q1 2025, Hyderabad’s office space leasing activity was largely driven by large & mid-sized transactions, which accounted for approximately 2.0 mn sq. ft., representing over 80% of the total leasing volume. The tech sector remained the key demand driver, contributing 35% of the total leasing activity, followed by the healthcare and pharma sector at 17%.
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| Q1 2025 | 2025F | |
| Demand | 18.9mn sq. ft. | 71.0mn sq. ft. |
| Supply | 8.6mn sq. ft. | 81.5mn sq. ft. |
| Overall Grade A Stock | 806.2mn sq. ft. | 879.1mn sq. ft. |
Source: Savills India Research
| Gross Absorption (in mn sq. ft.) | Supply (in mn sq. ft.) | |||||||||
| Cities | Q1 2025 | Q1 2024 | Q4 2024 | QOQ Change | YOY Change | Q1 2025 | Q1 2024 | Q4 2024 | QOQ Change | YOY Change |
| Bengaluru | 4.9 | 4.5 | 3.2 | 54% | 10% | 3.7 | 1.9 | 4.2 | -11% | 97% |
| Chennai | 2.0 | 2.3 | 1.6 | 23% | -15% | 0.5 | 1.1 | – | NA | -56% |
| Delhi-NCR | 3.7 | 1.6 | 2.6 | 41% | 128% | 2.0 | 0.3 | 0.9 | 126% | 577% |
| Hyderabad | 2.5 | 3.3 | 4.0 | -37% | -25% | – | 0.4 | 4.1 | NA | NA |
| Mumbai | 3.3 | 3.1 | 2.6 | 27% | 6% | 1.0 | 2.2 | – | NA | -53% |
| Pune | 2.5 | 2.3 | 1.9 | 34% | 9% | 1.3 | 0.8 | 4.7 | -72% | 66% |
| Total | 18.9 | 17.1 | 15.9 | 19% | 10% | 8.6 | 6.7 | 13.9 | -38% | 28% |
Source: Savills India Research
“With 18.9 million sq. ft. of office space absorbed in Q1 2025, India has recorded its strongest start to the year since 2020 – marking a 10% year-on-year growth. This robust demand reflects sustained occupier confidence, supported by a stable macroeconomic outlook.We expect this leasing momentum to persist, driven by the tech, BFSI, manufacturing, and flexible workspace sectors in the coming quarters. Both domestic companies and Global Capability Centers (GCCs) are set to play a key role in fueling demand.” said Naveen Nandwani, MD, Commercial Advisory and Transactions, Savills India.
Key Highlights of Q1 2025 for the India office market
- In Q1 2025, India witnessed the strongest leasing activity, reaching 18.9mn sq. ft.,a 10% YOY increase.
- Bengaluru continued to lead the pack contributing 26% to the total leasing activity, followed by Delhi-NCR with a 19% shareand Mumbai with an 18% share.
- The tech sector dominated the leasing activitywith 32% share, followed by BFSI at 21% and flexible workspaces at 13%.
- Large deals (100,000 sq. ft. or more) continued to dominate the gross leasing activity this quarter, contributing 47% to overall transactions.
- Bengaluru and Delhi-NCR together witnessed 5.7 mn sq. ft. of new completions in Q1 2025, comprising nearly two-thirds of the total supply added across India.
City-wise Key Trends
- Bengaluru continues to maintain its leadership position in office space leasing, consistently outperforming other cities in terms of demand. The city’s office leasing market remains driven primarily by IT-BPM occupiers, accounting for 38%, followed by the Engineering & Manufacturing sector, at 27% share, reinforcing their roles as the key demand drivers in Bengaluru’s commercial real estate landscape.
- Delhi-NCR ranked second after Bengaluru, recording a gross absorption of 3.7 mn sq. ft. Notably, fresh take-up accounted for 1.8 mn sq. ft., while the remaining 1.9 mn sq. ft. comprised pre-committed spaces that were realized as under-construction projects reached completion. The market was largely driven by activity in the BFSI and IT-BPM sectors, which contributed 34% and 26% respectively to the overall leasing volume.
- Mumbai stacks up at the third place in terms of gross absorption. The conventional demand driver ofthe BFSI sector continued to be at the top in Q1 2025 with a 45% share, followed by the tech sector garnering a 13% share.
- Pune stood at fourthplace with9% YOY rise in gross absorption, driven by higher office take-up by occupiers in IT-BPM and BFSI sectors as well asflexible workspace operators.
- Hyderabad’s office space leasing activity was largely driven by large& mid-sized transactions, which accounted for approximately 2.0 mn sq. ft., representing over 80% of the total leasing volume. The tech sector remained the key demand driver, contributing 35% of the total leasing activity, followed by the healthcare and pharma sector at 17%.
- The Chennai office market was driven by large-sized deals (100,000 sq. ft. or more), which contributed 66% of the total leasing volume.