Grade A office leasing in Q2 CY25 up 11% across top 7 cities: Colliers

Business Standard

26-06-2025

Gross grade A office leasing across the top seven Indian cities in Q2 CY25 grew by 11 per cent year on year (YoY) to 17.8 million square feet (msf), according to a report by Colliers.
The growth is said to be due to rising occupier confidence, particularly from flex space operators and firms across sectors like technology, BFSI, and engineering and manufacturing, despite ongoing global uncertainties.
In Q2 CY25, five out of the top seven office markets in India witnessed growth in grade A space uptake on an annual basis. Bengaluru led leasing activity with a 27 per cent share at 4.8 msf, but growth remained flat. Hyderabad, Mumbai, and Chennai each recorded over 2.5 msf of leasing in the quarter. However, space uptake in Mumbai declined by 20 per cent YoY.
"The robust performance in the first half—with demand reaching 33.7 msf, a 13 per cent year-on-year increase—signals sustained occupier confidence and strong market fundamentals. Backed by a diversifying occupier base, a steady supply pipeline and growing investor appetite, 2025 is shaping up to be another impressive year for commercial real estate in India. Overall, office space demand looks well placed to reach 65–70 msf at least by the end of the year," said Arpit Mehrotra, Managing Director, Office Services, India, Colliers.
Gross absorption does not include lease renewals, pre-commitments and deals where only a letter of intent has been signed.
Meanwhile, overall supply during the quarter grew by 11 per cent YoY to 14.9 msf. However, cities including Delhi NCR, Mumbai, Kolkata, and Hyderabad recorded a decline on a YoY basis.
Of the total 17.8 msf of leasing in Q2 CY25, leasing by flex space operators stood at 4.3 msf. Conventional leasing remained at 13.5 msf, led primarily by the technology and BFSI sectors. Technology firms alone accounted for 6.4 msf space uptake—a 42 per cent YoY growth, driven largely by Global Capability Centre (GCC) expansion.
Amal Mishra, Founder and Chief Executive Officer, Urban Vault, said, 'Despite the global uncertainty, the demand for office space continues to gain momentum, driven by competitive operating costs and the growing availability of build-to-suit facilities. This rising demand is not limited to start-ups or small enterprises; large corporations and GCCs are also actively seeking flexible and customised workspaces.'
Additionally, the overall vacancy level remained almost stable at 16.2 per cent amid relocations and churns. However, Pune and Hyderabad, with significant completions in Q2 CY25, were at relatively higher vacancy levels.