The Indian commercial real estate sector has shattered records, demonstrating remarkable resilience and growth in the first half of 2025. According to the latest data from leading real estate consultancy CBRE, the country's office market witnessed a staggering 25% year-on-year growth, with gross leasing activity reaching an unprecedented 61.4 million square feet between January and June. This performance not only surpasses the previous highs but also signals robust confidence from domestic and global corporations in India's economic landscape.
Bengaluru Leads the Charge, Tech Sector Remains Dominant
The surge in demand was not uniform but showcased the continued dominance of key metropolitan hubs. Bengaluru emerged as the undisputed leader, accounting for a massive 31% share of the total leasing volume. The city's thriving tech ecosystem and talent pool continue to attract massive commitments. Following Bengaluru, Delhi-NCR and Hyderabad captured significant shares at 18% and 17% respectively, rounding out the top three markets. The driving force behind this demand remains the technology sector, which was responsible for nearly 29% of all leasing activity. This underscores India's pivotal role in global technology services, research, and innovation.
Other sectors contributing substantially to the demand include flexible workspace operators (18%), engineering & manufacturing (15%), and the fast-growing BFSI (Banking, Financial Services, and Insurance) segment (13%). The significant share of flexible spaces highlights a fundamental shift in corporate real estate strategies, with companies prioritizing agility and hybrid work models in their portfolio planning.
Flexible Workspaces and Domestic Firms Fuel Growth
A deep dive into the leasing trends reveals two powerful narratives. First, the flexible workspace segment has solidified its position as a major demand driver, not just a niche. Operators are expanding aggressively to cater to the evolving needs of both large enterprises and startups. Second, domestic firms have stepped up their game remarkably. Their share in total leasing surged to 45% in H1 2025, compared to 35% in the same period last year. This indicates a strong expansion and upgrade cycle within homegrown companies across technology, finance, and engineering sectors.
On the supply side, the first half of 2025 saw the completion of approximately 28.2 million square feet of new office space. A substantial 57% of this new supply was concentrated in just three cities: Bengaluru, Hyderabad, and Delhi-NCR. This pipeline ensures that quality Grade-A inventory is available to meet the sustained demand, although the report notes a trend of selective leasing where tenants favor modern, sustainable, and well-located buildings.
Future Outlook: Sustained Momentum with a Focus on Quality
The record-breaking numbers for the first half set a bullish tone for the remainder of 2025. Analysts expect the momentum to continue, fueled by a combination of stable economic fundamentals, India's growing prominence in global capability centers (GCCs), and the relentless demand from the technology and flexible workspace sectors. The market is also witnessing a flight to quality, with corporations showing a clear preference for spaces that offer superior amenities, green certifications, and better employee experience.
This trend is likely to accelerate the development of next-generation office parks and integrated complexes. The performance of the office market is a strong leading indicator of business confidence and job creation. The record 61.4 million square feet of leasing activity translates into significant direct and indirect employment and reinforces India's position as one of the world's most dynamic commercial real estate destinations. The challenge for developers and city planners will be to ensure that infrastructure keeps pace with this explosive growth in key micro-markets.
