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Bengaluru, India's leading office market, experienced a sharp 28% drop in gross office space leasing during the first quarter of 2025, as reported by Cushman & Wakefield. Leasing activity declined to 48.6 lakh sq ft compared to 67.4 lakh sq ft in the same period last year. Net leasing also saw a 33% decline. Interestingly, new office supply in the city rose by 52% to 32.8 lakh sq ft. Across eight major cities, however, gross and net office leasing showed moderate growth, indicating that demand is still firm nationwide despite regional fluctuations.
India's tech capital, Bengaluru, saw a significant contraction in gross office space leasing during the first quarter of 2025. According to real estate advisory firm Cushman & Wakefield, gross leasing volumes in the city declined by 28% year-on-year, falling to 48.6 lakh square feet from 67.4 lakh square feet recorded during the same period last year. Advertisement
Net absorption of office space in the city also declined notably, shrinking by 33% to 24.9 lakh square feet compared to 36.9 lakh square feet leased during the corresponding quarter of the previous year.
In contrast, new supply in Bengaluru's office market surged by 52%, reaching 32.8 lakh square feet up from 21.5 lakh square feet seen earlier. Despite the fall in leasing activity, the city's office vacancy rate remained relatively healthy at 9.7% during the quarter.
Nationally, India's top eight cities Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Pune, Hyderabad, and Ahmedabad collectively recorded a 4.5% rise in gross office leasing, touching 202.9 lakh square feet compared to 194.2 lakh square feet a year ago. Net leasing across these cities grew 20% to 134.4 lakh square feet, indicating continued occupier confidence in the market.
Anshul Jain, Chief Executive for India, SEA & APAC Tenant Representation at Cushman & Wakefield, observed that momentum in India's office sector carried forward into the first quarter, supported by consistent large deal closures and strong fresh leasing activity. He noted that global occupiers remain committed to expanding their presence in India, reinforcing the country's status as a strategic business hub.
He further pointed out that India's growing prominence in the global tech, research and innovation space is being supported by a resilient Global Capability Centre (GCC) segment, which now contributes more than 30% to gross leasing. This trend, he indicated, is likely to continue with more greenfield projects and expansion plans on the horizon.
Jain added that domestic economic conditions such as moderating inflation and expected interest rate cuts could further stimulate occupier interest. With growing adoption of flexible workspaces and healthy supply additions across major micro-markets, he projected that the office real estate sector would maintain its upward momentum in the coming quarters.
Continued demand from global firms, the rise of GCCs, and supportive macroeconomic trends are acting as key stabilisers. If these factors remain intact and the supply gets absorbed over the next few quarters, Bengaluru could recover quickly, regaining its leading position in India's commercial real estate space.
Source: PTI
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