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The office property market in Delhi-NCR and Mumbai saw a decline in new supply last year, falling 15 per cent and 37 per cent, respectively, while overall demand from technology, BFSI, and foreign firms setting up GCCs remained strong. Across seven major cities, fresh office space reached 56.5 million sq ft, up 5 per cent from 2024, with leasing absorption growing 6 per cent. Vacancy levels fell, and rents increased up to 15 per cent. Bengaluru, Chennai, and Pune led new supply growth, while Delhi-NCR, Mumbai, Hyderabad, and Kolkata witnessed declines. Major REITs continue to drive structured investment in the sector.
Delhi-NCR and Mumbai experienced a significant decline in the addition of new office spaces last year, with the former seeing a 15 per cent fall and the latter 37 per cent, even as demand for premium workspaces from domestic and international companies remained strong, according to Colliers India. Advertisement
Across India's seven major cities Bengaluru, Delhi-NCR, Mumbai, Hyderabad, Chennai, Pune, and Kolkata office demand exceeded new supply in 2025, driving a reduction in vacancy levels. Technology firms and the BFSI (Banking, Financial Services and Insurance) sector emerged as key contributors to this demand, alongside foreign companies setting up Global Capability Centres (GCCs) in India.
Colliers India reported that Delhi-NCR added 7.4 million sq ft of new office space last year, down from 8.7 million sq ft in 2024. Mumbai's fresh supply declined sharply to 5.2 million sq ft from 8.3 million sq ft the previous year. Hyderabad saw a 21 per cent reduction to 10.8 million sq ft from 13.7 million sq ft, while Kolkata's new supply plunged 80 per cent to just 0.1 million sq ft from 0.5 million sq ft.
Conversely, Bengaluru, Chennai, and Pune witnessed an improvement in fresh supply. Bengaluru added 17.5 million sq ft, a 15 per cent increase from 15.2 million sq ft. Chennai more than doubled its new supply to 4.5 million sq ft from 2.1 million sq ft, and Pune also saw a more than two-fold jump to 11 million sq ft from 5.3 million sq ft. Overall, these seven markets together saw a 5 per cent increase in new office supply to 56.5 million sq ft, up from 53.8 million sq ft the year before.
Leasing activity grew by 6 per cent, with absorption reaching 71.5 million sq ft across these cities compared to 67.2 million sq ft in 2024. As demand outpaced supply, overall vacancy levels dropped by 49 basis points, and average rentals rose by up to 15 per cent year-on-year, Colliers India noted.
Key real estate players in the office segment include DLF Ltd, Prestige Estates, K Raheja Group, Embassy Group, Sattva Group, and RMZ Group. India currently has four office asset-backed REITs: Knowledge Realty Trust (Sattva and Blackstone-backed), Mindspace Business Parks REIT (K Raheja Group-backed), Brookfield India Real Estate Trust, and Embassy Office Parks REIT.
Recently, Bengaluru-based Bagmane Group sponsored Bagmane Prime Office REIT filed a draft paper with SEBI to launch an IPO aiming to raise up to INR 4,000 crore. REITs allow investors to earn income from real estate without directly owning the properties, providing a structured investment route into commercial real estate.
Source PTI
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