India's Office Market Surges in 2025: Flexible Workspaces Drive Record Leasing
India's office real estate market has emerged as a standout performer in 2025, delivering record-breaking leasing activity while major global markets face weak demand and economic uncertainty. The market's exceptional performance is largely attributed to the rapid expansion of flexible workspaces, which have transformed from niche solutions to integral components of corporate real estate strategies.
According to Gulam Zia, Executive Director at Knight Frank, India's office leasing activity is positioned to close well above 80 million square feet in calendar year 2025. This achievement represents one of the strongest years on record for the Indian office market. The performance becomes even more remarkable when viewed against the backdrop of struggling global office markets.
The flexible workspace segment has experienced unprecedented growth over recent years, fundamentally reshaping India's office landscape. The expansion reflects deeper structural changes in corporate space utilization strategies, moving beyond traditional long-term lease models. Zia emphasized that flexible spaces have evolved significantly in their market positioning. “Flex is no longer a niche or stop-gap solution. It has become an integral part of corporate real estate strategy, especially for companies looking for scalability, speed-to-market, and cost flexibility,” he explained.
While office markets across developed economies struggle with remote-working trends and economic headwinds, India continues to demonstrate robust growth. The contrast is particularly stark when compared to other major markets globally. Office markets in the United States and Europe have been significantly impacted by changing work patterns and economic uncertainty. Even within the Asia-Pacific region, markets including China, Singapore, Australia, and Hong Kong have experienced either contraction or flat growth in office absorption. “India clearly stands out,” Zia noted. “Despite global headwinds, office demand here has grown spectacularly year-on-year, and this momentum is expected to continue.”
The strength of India's office market stems from multiple demand sources, providing resilience against global volatility. While Global Capability Centres (GCCs) remain significant contributors to office absorption, the market has benefited from increasing diversification. Zia highlighted the growing importance of domestic demand: “The demand is no longer only global-facing. Strong domestic growth is also supporting office leasing, which is a very healthy sign for the sector.” This diversification particularly benefits flexible workspace operators, who can serve both multinational corporations and domestic businesses effectively.
Market dynamics have been influenced by developer preferences shifting toward residential projects, particularly in the luxury segment. This shift has created supply constraints in the office sector while inadvertently supporting flexible workspace expansion. “As residential became the low-hanging fruit, office development slowed. This supply-side constraint has indirectly supported flex spaces, which can respond quickly to occupier needs without waiting for large new office completions,” Zia explained. The ability of flexible workspace operators to adapt existing spaces and respond rapidly to market demand has proven advantageous in this environment.
Knight Frank maintains an optimistic outlook for India's office market, particularly the flexible workspace segment. The combination of sustained demand, limited new office supply, and India's strengthening position as both a global and domestic business hub creates favorable conditions for continued outperformance. “The fundamentals are firmly in place,” Zia concluded. “India's office story—and especially the flex space segment—remains one of the brightest spots in global commercial real estate.” The market's resilience and growth trajectory position it favorably for continued expansion over the coming years.
