India's Q1 office leasing hits 19.46M sq. ft, domestic share rises

• Gross leasing in Q1 2025 at 19.46 million sq. ft; up 28.4% year-on-year and highest among all previous first quarters of any calendar year.

• Domestic occupiers, led by Flex and third-party outsourcing firms lease 8.82 million sq. ft in Q1 2025.

• Bengaluru was the leader for the fourth straight quarter in terms of leasing activity with 21.9%, followed by Delhi NCR with 21.6%

• Flex records the third straight quarter of leasing ~4 million sq. ft or more while accounting for 20.4% share of the quarterly leasing in Q1.

• Net absorption is 12.78 million sq. ft in Q1, up 54.0% year-on-year and highlighting the expansion-driven demand in the India office market.

MUMBAI, 16 APRIL 2025: The India office market remains firmly entrenched on the growth trajectory, with domestic occupiers ramping up their activity to record levels and leasing 8.82 million sq. ft in Q1 2025. Global occupiers continued to remain the mainstay of leasing activity, nevertheless, driven primarily by GCCs. On a year-on-year basis, gross leasing for the top seven cities was up 28.4% at the pan-India level and higher for all cities, barring Chennai.

Gross Leasing (million sq. ft) 

“The Indian office market has demonstrated remarkable resilience and growth in Q12025, underpinned by the strongest-ever performance by domestic occupiers which was driven by flex and third-party tech firms. A strong performance by BFSI along with the aforementioned ones has propelled net absorption to 12.78 million sq ft in Q1, up 54.0% year-on-year and further highlighting the expansion-driven demand in the India office market. This coupled with a trailing 12-month (April 2024-March 2025) gross leasing of 81.5 million sq. ft, indicates that the market is poised for another potential record-breaking performance in 2025,” said Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL

Domestic Occupiers Surge: Leasing by domestic occupiers was year-over-year higher in Bengaluru, Hyderabad, Mumbai and Pune. Flex was the dominant domestic occupier segment in Bengaluru and Pune accounting for 70.0% and 61.8%, respectively in the domestic occupier space take-up. BFSI was the biggest contributor in Mumbai while Tech was the major contributor in Hyderabad in the domestic occupiers’ leasing activity.

“The Q1 2025 office leasing data underscores India's position as a global business hub, with Bengaluru and Delhi NCR leading the charge, collectively accounting for 43.5% of leasing activity. The dominance of global occupiers, particularly GCC set-ups which comprised 64.1% of international leasing, reflects India's growing appeal as a strategic location for multinational operations. The market's robustness is further evidenced by a significant drop in vacancy rates to a four-year low of 15.7%, with prime locations experiencing single-digit vacancies. Tight vacancy levels in core markets coupled with steady demand, signal a bullish outlook for India's commercial real estate sector,” said Rahul Arora, Head - Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.

 Gross Leasing by domestic occupiers (million sq. ft)

Flex and third-party tech firms drive the domestic occupier activity in Q1; GCC set-ups by global firms are the primary driver of space leasing during the quarter. With flex segment seeing the third successive quarter when it has leased ~4 million sq. ft or more and third-party tech firms quite active in Q1 2025, these two segments combined to account for a 73.1% share of domestic leasing activity.

Net absorption jumps 54% year-on-year
India’s continued strength in terms of its talent pool, costs and overall tech ecosystem is a key driver for global firms to invest into their real estate growth with India as the focal point. On a year-on-year basis, net absorption was higher across all cities in Q1 2025, barring Mumbai.

Vacancy declines to a near four-year low
With quarterly supply at 10.5 million sq. ft, headline vacancy declined to its lowest in nearly four years to 15.7%, down by 50 bps quarter-on-quarter. Vacancy in key office clusters remains in tight single digits.

With one eye on evolving global trade and economy landscape, India’s office market forecast remains on track to match 2024 peak levels

There remains a sustained runway for growth as we continue to see strong demand from global and domestic occupiers. While the growth is expected to pivot around GCC activity, domestic occupiers will likely play a bigger role, especially those from the flex, BFSI and manufacturing segments. A short-term sluggishness in market activity may be seen as firms evaluate the impact of tariffs on the global economy landscape– both implied as well as explicit. The uncertainty and the emerging business strategies may also act as a tailwind to more offshoring opportunities for India from global firms. The fundamentals seem to support India’s continued dominance as an office destination among global firms, mostly driven by its prominence as a R&D capability hub across multiple industry domains.

*Gross leasing refers to all lease transactions recorded during the period, including confirmed precommitments, but does not include term renewals. Deals in the discussion stage are not included

**Net absorption is calculated as the new floor space occupied less floor space vacated. Floor space that is pre-committed is not considered to be absorbed until it is physically occupied

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.co.in