Domestic firms drive 46% of India's record office leasing growth

• Domestic occupiers have significantly increased their market presence, accounting for 46% of gross leasing activity since 2022, up from a 35% share during 2017-2019.
• Leasing by domestic firms reached record levels in 2024 with 31.9 million sq. ft, with strong momentum continuing into Q1 2025 (8.8 million sq. ft).
• Flex operators have replaced Tech as the largest domestic industry segment, now representing 36% of domestic leasing activity since 2022.
• Banking and Financial Services (BFSI) firms have increased their market share by over 50%, driven by regional headquarters expansion and the growing fintech industry.
• Average deal sizes have grown substantially across sectors, with BFSI seeing the largest increase, followed by Manufacturing.
• Flex operators secure the largest spaces per transaction, averaging 57,000- 60,000 sq. ft.
  
• Delhi NCR leads in domestic leasing activity, while Mumbai has shown the most significant growth with its share increasing by approximately 62%.
   

MUMBAI, JUNE 04, 2025: Indian firms have significantly increased their footprint in the commercial real estate market, with domestic occupiers accounting for 46% of gross leasing activity* since 2022, up from 35% during 2017-2019. Leasing volumes by domestic firms reached unprecedented levels in 2024 with 31.9 million sq. ft, with them continuing the strong momentum into Q1 2025 with 8.8 million sq. ft already leased. According to JLL, the BFSI sector has recorded the most substantial growth in average transaction size. BFSI firms have more than doubled their space requirements, with average deal sizes jumping from 10,500-11,500 sq. ft in 2017-2019 to 24,000-25,000 sq. ft in the 2022-Q1 2025 period, representing a staggering 125-130% increase. 

“Domestic companies are transforming India's commercial real estate landscape, representing a fundamental shift in market dynamics. This evolution reflects India's strengthening economy and changing corporate strategies focused on efficiency and consolidation. The shift in India's office leasing landscape is quantifiable - domestic occupiers now account for 46% of gross leasing activity versus 35% pre-pandemic. While global occupiers remain the mainstay, the rising importance of Indian occupiers in the office market will continue to support the rising leasing activity levels in the country. Both these together have the potential to push India’s leasing volumes to over 100 million sq. ft over the next 3-4 calendar years” said Dr. Samantak Das, Chief Economist and Head of Research & REIS, India, JLL. 

Manufacturing follows closely behind with average deals growing from 7,000-8,000 sq. ft to 15,000-16,000 sq. ft, a 100-120% increase that reflects India's strengthened focus on domestic production capabilities. While flex operators continue to secure the largest spaces per transaction at 57,000-60,000 sq. ft (up 35-45% from previous levels), technology firms have also substantially increased their footprint. The IT & ITeS sector now averages 31,000-32,000 sq. ft per deal, up 85-95% from the 2017-2019 period. The growth in average deal sizes can be attributed to strategic consolidation efforts by BFSI companies centralizing operations, enhanced government policy support for manufacturing, and growing space needs from enterprise clients driving flex space demand. 

This trend of larger deal sizes spans all sectors and coincides with domestic occupiers increasing their overall market share to 46% of total leasing activity, signaling a fundamental shift in India's office market dynamics. 

Geographically, Delhi NCR leads in domestic leasing activity, while Mumbai has shown the most significant growth with its share increasing by approximately 62% since 2022 compared to the 2017-2019 period. Delhi NCR maintains its leadership position for domestic occupiers despite recent marginal declines, benefiting from a diversified industry ecosystem where flex operators command over 30% of leasing activity. Mumbai's surge is largely attributed to financial sector expansion, with BFSI firms consistently representing more than 30% of domestic demand, establishing a clear industry specialization pattern in India's commercial hubs.

"The evolution of India's domestic corporate real estate landscape reveals a fascinating divergence in occupier preferences across major metros. Delhi NCR and Mumbai have emerged as clear frontrunners, but with distinctly different demand drivers. While Delhi NCR attracts a diverse spectrum of domestic firms with flex space solutions dominating nearly a third of its demand, Mumbai has witnessed a remarkable 62% growth in domestic leasing activity since 2019, firmly establishing itself as the financial hub with banking and financial services consistently representing over 30% of its occupier base,” said Rahul Arora, Head - Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.

For domestic tech enterprises, tech-talent centers remain strategically critical despite overall market diversification, highlighting India's increasingly specialized commercial real estate landscape.

India's commercial real estate landscape is experiencing a significant transformation, with domestic occupiers emerging as key growth drivers. Flexible workspace providers continue showing heightened activity, while financial inclusion is fueling expansion among domestic BFSI and fintech firms. As global companies maintain their focus on India, local technology, consulting and manufacturing enterprises are capitalizing on partnership opportunities. Domestic pharmaceutical, biotech, EPC, aviation and OEM sectors are further accelerating this trend, leveraging India's talent base, cost advantages, and supportive policy environment.

*Gross leasing refers to all lease transactions recorded during the period, including confirmed precommitments, but does not include term renewa.

Note: The analysis has been made here of the leasing volumes from 2017 to Q1 2025 (Jan-March 2025) and split the period to pre-COVID (2017-2019) and post-COVID (2022-1Q25). The COVID affected period has been not considered to remove event-specific trend anomalies.

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of over 16,000 professionals. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit jll.com