Office Market Soars: GCCs and domestic demand drive Q2,2025 growth

• Second quarter (Q2 2025) gross leasing reaches 20 million sq. ft, highest among all previous second quarter numbers
• International firms continue to view India as a strategic talent hub, accounting for 61.5% of Q2 leasing volumes despite global economic uncertainties.
• Global Capability Centers show remarkable 30.8% y-o-y growth in H1 2025, reaching 13.85 million sq. ft - already exceeding previous annual totals.
• Manufacturing has emerged as the second-largest contributor to Q2 leasing, followed by BFSI and Flex space providers
• Six of seven major markets showed growth or stability on a year-over-year basis
• Net absorption reached 23.90 million sq. ft in H1 2025, up 26.6% y-o-y, indicating genuine expansion rather than mere relocations
• Market trajectory suggests potential to exceed 80 million sq. ft by year-end

MUMBAI, July 07, 2025: India's office market continues to demonstrate strong momentum despite significant global economic uncertainties and headwinds with gross leasing numbers hitting a new high of 39.45 million sq. ft in H1 2025 (Jan-June 2025) and up by 17.6% Year-on-Year (y-o-y). This was achieved on the back of a stronger-than expected Q2 (April-June) with global firms leading the charge. They accounted for a strong 61.5% share in leasing volumes with India’s continued prominence as a global talent hub shining brightly. 

 In fact, Q2 2025 hit 20 million sq. ft in leasing volumes, marking the strongest-ever second quarter performance for any year. The market also outperformed expectations supported by the continued strength in domestic occupiers led demand who combined to lease 7.7 million sq. ft in Q2 2025. The year remains cumulatively on track for the strongest annual performance by domestic firms. This sustained demand reflects corporate India's confidence in long-term growth prospects and the country's strategic importance in multinational corporations' global footprints.

“India's office market is defying global economic headwinds with remarkable resilience, as evidenced by record-breaking gross leasing of 39.45 million sq. ft in H1 2025—a robust 17.6% y-o-y increase. This exceptional performance, driven by global occupiers who account for 61.5% of quarterly transactions, puts the market on trajectory to surpass an unprecedented 80 million sq. ft annually. With the top seven cities consistently delivering approximately 21 million sq. ft per quarter over the past year, India has cemented its position as a mission-critical destination in multinational corporations' global strategies, reflecting deep-seated confidence in the country's long-term growth potential,” said Dr Samantak Das, Chief Economist and Head of Research and REIS, India, JLL

Demand for high-quality offices remains strong across the major metros, with Bengaluru leading the pack for the fifth straight quarter. In fact, Bengaluru had its second-highest quarterly leasing volumes ever after Q4 2024. The city accounted for a significant 37.6% share of the quarterly leasing activity. Delhi NCR followed with a 20.8% share

H1 comparison shows all cities demonstrating higher or near-similar year-over-year performance, with Kolkata being the sole exception.

Gross Leasing (in million sq. ft)

Source: Real Estate Intelligence Service (REIS), JLL Research

“Bengaluru's office market dominance reflects India's evolving economic landscape, with its record-breaking Q1 2025 performance capturing 37.6% of national leasing activity. The technology sector's resurgence to a three-year high market share of 30.3% in H1, combined with GCC activity breaking all previous Jan-June period records , signals India's commercial real estate dynamics to be in a very healthy state. Meanwhile, tech firms have already secured 9.1 million sq. ft in H1 2025—equivalent to 75% of their entire 2024 footprint—as they pivot toward high-value transformative technologies, underscoring a strategic realignment toward innovation-driven expansion across India's prime office markets.” Rahul Arora, Head - Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.

GCC activity up 30.8% y-o-y in H1 2025 to 13.85 million sq. ft with manufacturing and BFSI leading the way

GCCs are leading the charge in India’s office market and on a H1 comparison, leased more space in Jan-June of 2025 than any previous calendar year for the same time period. This follows the momentum from last year, when GCCs were the biggest occupier group by activity levels. GCCs in the BFSI and Manufacturing sector have been the standout performers, accounting for a cumulative 55.6% share in the H1 leasing volumes. Bengaluru remains the gateway city for GCCs, accounting for over 41% of demand in H1 2025. On an overall basis, Tech leads in overall leasing volumes with a 30.3% share in H1, followed by Flex with 17.0%, BFSI with 16.2% and manufacturing with ~15% share. For Q2, Tech remained the leader in absolute leasing terms accounting for a 30.8% share, with Manufacturing and BFSI capturing the next two spots in terms of contribution, followed by Flex. Consulting firms were major movers this quarter, accounting for their biggest quarterly space take-up in Q2 2025.

Leasing activity by occupier category (million sq. ft)

Source: Real Estate Intelligence Service (REIS), JLL Research

Net absorption in H1 2025 up by 26.6% and is highest among first quarters in all previous years

It is worth noting that India’s office market has bucked the global trends of workspace contraction. Headcount and footprint growth-oriented demand resulted in net absorption in H1 hitting 23.9 million sq. ft which was also the highest ever among all previous H1 comparisons. On a y-o-y basis, net absorption was also up by 5.2% at 11.13 million sq. ft.

Indian office sector continues its remarkable growth trajectory despite international economic challenges, driven by GCCs, tech revival, and strong BFSI demand

India office market momentum likely to remain immune to global headwinds; remains firmly on track to likely surpass 2024 peak levels. India is a shining beacon on the international office market stage as it appears to be immune to the global uncertainties and headwinds. The market is tuned towards growth – across both headcount and real estate footprint metrics, even as robust office occupancies are already causing a space crunch in existing portfolios of large occupiers.

The market currently is well-ahead of plan with H1 performance anticipated to take the country’s leasing volumes to unprecedented levels of 80 million sq. ft or even higher. On average, the country across the top seven cities has leased ~21 million sq. ft on average over the past four quarters.

Demand from GCCs – both existing ones and new country entrants remains strong, making up ~50% of all active space requirements. At a sector level, the resurgence in third-party tech along with strong space demand emanating from global BFSI firms for their offshoring hubs and manufacturing scripting strong demand levels driven by the policy ecosystem are key drivers for the long growth runway ahead. As transaction volumes continue to surge, vacancy rates remain healthy, and development pipelines stay active, it paints a picture of a market operating in its own confident rhythm, driven by the fundamentals of its deep talent pool, innovation and costs.

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

**Net absorption is calculated as the new floor space occupies 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.com