India’s office space in India market is evolving rapidly, driven by various trends, including the return to physical offices, the rise of flexible workspaces, and increasing demand for sustainable and employee-centric designs. As we look ahead to 2025, several factors will shape the future of office space in India. In this article, we explore the major trends that will define India's office market, with an emphasis on post-pandemic recovery, the growth of flexible spaces, southern cities' dominance, sustainability, and the increasing role of global corporations.

Post-Pandemic Recovery: The Return to Office Spaces

The Indian office space in India market is seeing a strong recovery as businesses increasingly return to physical offices after the pandemic. According to Cushman Wakefield, gross leasing volume reached 89 million square feet in 2024, marking a 19% YoY increase from 2023. This is the third consecutive year of growth in the office leasing market, signalling that businesses are eager to create collaborative environments that foster innovation and teamwork.

Several factors have contributed to this resurgence. The shift to hybrid work models has created new office space in India needs, as businesses seek to accommodate flexible workforces. Companies are prioritizing well-designed office environments that align with post-pandemic needs, which include more open spaces, natural lighting, and advanced air filtration systems. Moreover, there is a growing demand for Grade A office spaces that offer high-quality amenities and meet sustainability standards.

Another notable shift is the growing demand for long-term office leases, as businesses seek stability after the uncertainty of the pandemic. Cities like Bengaluru, Hyderabad, and Delhi NCR are seeing increased leasing activity, with Bengaluru accounting for 25% of India’s total office leasing volume in 2024. As companies settle into a new rhythm, the office is once again becoming an essential part of the workplace ecosystem.

The Rise of Flexible Workspaces

India's flexible workspace market is experiencing explosive growth, a trend that is reshaping the office leasing landscape. The demand for co-working spaces and flexible office solutions grew by 57.5% YoY in 2024, with 12.4 million square feet of flexible office space in India leased. Cities like Bengaluru, Delhi NCR, and Mumbai have been at the forefront of this transformation, with major operators like WeWork, Regus, and Awfis expanding rapidly to meet the demand for flexible workspaces.

The rise of hybrid work models has played a key role in this trend. As businesses seek more agile office solutions, flexible workspaces provide the perfect option for companies looking to scale up or down as needed without long-term commitments. For example, Bengaluru’s flexible workspace market grew by 25% in 2024, with large IT companies and startups alike choosing to adopt flexible office space in India solutions to meet their evolving needs.

In addition to flexibility, companies are seeking spaces that offer collaborative environments and amenities that enhance employee experience. Co-working spaces now offer a variety of services, from high-speed internet and video conferencing facilities to wellness zones and social areas. This shift reflects the growing importance of employee engagement and well-being in the workplace, with businesses seeking spaces that support creativity, collaboration, and work-life balance.

Southern Cities Leading the Way in Leasing Activity

Southern cities, particularly Bengaluru, Hyderabad, and Chennai, continue to dominate India’s office space in India leasing market. Bengaluru remained the top market for office leasing in 2024, accounting for approximately 21.8 million square feet of leased office space, driven by strong demand from the IT and tech sectors. Similarly, Hyderabad saw an impressive 12.3 million square feet leased in 2024, while Chennai recorded a 10% YoY increase in leasing activity, with 8.0 million square feet leased.

The growth of these cities can be attributed to several factors. Bengaluru remains a key hub for technology and software companies, with over 80% of leasing activity driven by the IT and IT-enabled services (ITES) sectors. Hyderabad has become an attractive destination for global companies, especially those in pharmaceuticals, fintech, and banking, while Chennai is seeing a rise in demand from both domestic companies and global enterprises looking to expand their presence in India.

These cities offer several advantages for businesses, including access to a skilled workforce, lower operational costs compared to Mumbai or Delhi NCR, and well-developed infrastructure. As a result, southern India is projected to see continued growth in office leasing, with major developers planning new projects to meet the increasing demand.

Sustainability and Wellness: Meeting New Demands

The demand for sustainable and wellness-oriented office spaces has surged as businesses increasingly focus on green building certifications and creating healthier work environments. As of 2024, India continues to lead globally, with more than 1.8 billion square feet of green buildings, accounting for 15-16% of India’s total building stock, including office spaces. This trend is projected to grow, with the green building footprint expected to expand by an additional 500-600 million square feet by 2025. This growing footprint highlights the increasing importance of sustainability and wellness in India's office space in India market.

According to Cushman & Wakefield and JLL, the market for LEED-certified office spaces has significantly increased. In 2024, 52% of new office developments in major cities like Bengaluru, Delhi NCR, and Mumbai were built with sustainability in mind, either LEED-certified or equivalent green standards. These green buildings are designed to be energy-efficient, with low carbon footprints, better air quality, and water-saving features, aligning with businesses’ sustainability goals.

Looking ahead to 2025, green buildings will continue to be a key trend in India’s office market, with Bengaluru and Hyderabad leading the charge. There is an expected 10-15% increase in green-certified office space in India demand over the next two years, as companies strive to meet their sustainability targets and appeal to a growing base of environmentally-conscious employees.

Beyond energy efficiency, businesses are also demanding wellness-focused spaces. Features such as natural lighting, biophilic design, ergonomic furniture, and air purification systems have become critical elements in attracting top talent. The wellness trend is not just about the physical environment but also the mental health of employees. In fact, 80% of corporate occupiers in India now consider wellness features as a critical factor in choosing office spaces, according to JLL India.

The global shift towards wellness and sustainability is likely to continue in 2025, and office space developers who integrate these features will be at the forefront of India’s commercial real estate market.

The Role of GCCs and MNCs in Shaping Leasing Trends

Global Capability Centres (GCCs) and multinational corporations (MNCs) have become critical drivers of office space demand in India, contributing significantly to the leasing boom, particularly in southern cities like Bengaluru, Hyderabad, and Chennai. In 2024, GCCs accounted for approximately 35.9% of the total office leasing activity in India, leasing about 28 million square feet of office space. Bengaluru, a key hub for tech and engineering GCCs, saw these centres occupying 52% of the city’s total leasing transactions, amounting to 9.3 million square feet.

The demand from GCCs is largely driven by India’s skilled workforce and cost-effective operational advantages. With a highly educated talent pool, especially in the tech, engineering, and financial services sectors, GCCs are expanding rapidly to tap into India’s low-cost, high-quality labour force. The growth in demand from these centres is expected to rise by 10-15% in 2025, particularly as global companies look to outsource more functions and establish India as their strategic operations hub.

MNCs are also major contributors to the growth of Grade A office spaces. These companies require modern, tech-enabled office spaces that meet global standards and are equipped with the latest infrastructure, sustainability features, and employee wellness provisions. The expansion of MNCs in India is forecasted to increase demand by another 20% over the next two years, with Bengaluru and Hyderabad leading in the demand for high-end office space. As MNCs continue to scale their operations and tap into India's growing middle class, they are fuelling the need for more state-of-the-art office spaces.

Rising Office Rents and Their Impact

The demand for premium office spaces across key cities in India has led to a notable increase in rents, especially in prime commercial locations. In Bengaluru, average rents rose by 6% YoY in 2024, reaching ₹92 per square foot per month. Similar trends are being observed in Hyderabad and Delhi NCR, where rents have increased as demand for Grade A spaces continues to outpace supply.

While this surge in rents is a positive sign for developers and property owners, it also creates challenges for businesses, particularly startups and SMEs. These companies may face difficulties in affording the high rent costs in prime locations, potentially pushing them to consider flexible workspaces or secondary business districts where rents are lower but still provide proximity to key business hubs. Some businesses are also looking outside metro areas to cities like Pune, Chandigarh, and Kochi, where office rents are more affordable and infrastructure is improving rapidly.

The trend of rising rents is projected to continue through 2025, especially in top-tier cities, as businesses increasingly prioritize high-quality office environments that support collaboration, innovation, and employee wellness. However, to maintain competitiveness, developers will need to offer value-driven propositions—including sustainability features, smart building technologies, and flexibility—to justify the higher rent costs.

Looking Ahead: What’s Next for Office Leasing in India?

The future of office space in India is promising, with strong leasing activity expected to continue into 2025 and beyond. Projections indicate that gross leasing volume across the top six cities—Bengaluru, Delhi NCR, Hyderabad, Chennai, Mumbai, and Pune—could reach 65-70 million square feet in 2025. Demand will be driven by continued growth in GCCs, engineering firms, BFSI (banking, financial services, and insurance) players, and flex space operators. Bengaluru will continue to be a leader, accounting for approximately 30-35% of the total leasing activity in India, followed by Hyderabad and Delhi NCR.

The trend of sustainability will be a defining feature of the office market in 2025. As companies continue to prioritize environmental responsibility, the demand for green office spaces that align with LEED and net-zero energy standards is expected to increase by 10-15%. This trend is not only driven by government regulations but also by growing expectations from employees who increasingly prefer to work in eco-friendly environments. Wellness-focused office spaces that incorporate features like biophilic design, ergonomic furniture, and air purification systems will be increasingly sought after.

Developers that integrate sustainability and employee wellness into their buildings will gain a competitive advantage as businesses align their office spaces with their corporate social responsibility (CSR) and ESG (environmental, social, and governance) goals. These changes will reshape the office leasing landscape, making sustainability a key criterion in the selection process, further boosting demand for Grade A office spaces across India.

Conclusion

India’s office space in India market is evolving at an unprecedented pace, driven by key trends such as the rise of flexible workspaces, increasing demand in southern cities, a growing focus on sustainability, and the dominance of Global Capability Centres (GCCs) and multinational corporations (MNCs). With continued growth expected in 2025 and beyond, developers and businesses must stay ahead of these trends to thrive in an increasingly competitive market.

The demand for Grade A office spaces, particularly in southern cities like Bengaluru, Hyderabad, and Chennai, will continue to surge as these cities solidify their positions as major business hubs. At the same time, sustainability will be a critical factor driving the future of the office market, with green buildings and wellness-oriented spaces becoming the standard rather than the exception. The next wave of office developments will likely see 10-15% growth in green-certified spaces, as businesses align their corporate social responsibility (CSR) and ESG goals with their real estate needs.

The shift toward flexible office solutions will continue to reshape the office leasing landscape, with co-working spaces and hybrid work models offering businesses the agility to scale up or down in response to fluctuating market demands. In this evolving environment, companies that embrace sustainability, flexibility, and employee wellness will be best positioned to attract top talent and foster productivity.

The future of office space in India looks promising, with significant opportunities for those who adapt to these changing trends. Developers and occupiers who understand the evolving needs of businesses and employees—and proactively respond to them—will be well-positioned to succeed in a dynamic market.

---

Data and insights in this article have been sourced from reports by Cushman & Wakefield, Knight Frank, CBRE-Hysea, Colliers, Anarock, JLL (Jones Lang Lasalle) and Savills.

Follow Woodkraft on LinkedIn for the latest updates and inspiring workspace solutions.

Click: Woodkraft (India) Private Limited | LinkedIn