Office Space Sees Major Dip in Q1 2025, But Key Cities Drive 86% of Supply

Cushman and Wakefield reports that new office supply statistics for Q1 2025 reached 10.7 million sq ft but registered a YoY decline of 13 percent and a QoQ drop of 27 percent because of certification delays and project period extensions. The new office supply distribution in Q1 2025 showed that Bengaluru (3.28 msf) and Pune(3.21 msf) together with Delhi-NCR(2.71 msf) amounted to 86 percent of the total.

The absence of new office projects within Chennai and Kolkata and Ahmedabad prevented market vacancies from decreasing which elevated leasing costs. Vacancy throughout India's eight leading office markets reduced to 15.7 percent as supply shortages caused the most significant drops in Mumbai and Kolkata.

"While we remain watchful of evolving global economic conditions, India’s position as the global hub for tech, R&D, and innovation continues to strengthen. The strong performance of the GCC segment—now contributing over 30 percent of gross leasing—underscores this confidence, and we expect this trajectory to continue with more greenfield entries and expansion mandates," Anshul Jain, Chief Executive, India, SEA & APAC Tenant Representation, said.

Cushman and Wakefield revealed that gross leasing volume (GLV) in Q1 2025 amounted to 20.3 million sq ft showing a 5 percent rise from previous years and reaching the two-year quarterly average level. The third continuous quarter demonstrated steady occupier expansion through fresh leasing which made up 80 percent of total activity. Mumbai leased 4.31 million square feet of space and Bengaluru took 4.86 million square feet with Pune, Delhi-NCR and Hyderabad after them and Chennai rounding out the top five. This period recorded the third-highest net absorption value at 13.4 million of which exhibited a 20 percent annual increase. The regions of Delhi-NCR joined by Mumbai and Bengaluru generated 63 percent of overall activity while Pune marked its best performance yet and Delhi-NCR posted its best numbers since Q4 2019.