Office Space Completions in Q1 2025 Reach 10.7 Million Sq Ft, Down 13% YoY: C&W Report
In the first quarter of 2025, the completion of new office spaces in key cities registered a 13% year-over-year decline, touching 10.7 million square feet. Bengaluru led the GCC leasing with 37%, while Pune and Hyderabad showed significant growth.
Office SpaceReal EstateCushman WakefieldLeasing ActivitySustainabilityReal Estate PuneApr 23, 2025
Bengaluru, often a frontrunner in the tech and IT sectors, accounted for 37% of the Gross Commercial Construction (GCC) leasing activity. The city's robust infrastructure and a large pool of skilled professionals continue to attract significant investment from both domestic and international companies. Pune and Hyderabad, on the other hand, recorded notable quarter-on-quarter (QoQ) growth in leasing activities. These cities are rapidly emerging as preferred destinations for businesses due to their lower operational costs and favorable business environments.
The report highlighted that while the overall completion numbers were down, the leasing activity remained robust, particularly in tech and IT hubs. This trend suggests that despite the slower development pace, there is a strong demand for office spaces among companies looking to expand or relocate their operations. The availability of high-quality office spaces in well-connected areas continues to be a critical factor influencing corporate decisions.
In Mumbai, the second-largest market for office spaces, the completion numbers were relatively stable, with a slight QoQ increase. The city's strategic importance as a financial hub and the presence of numerous multinational corporations have sustained its demand for premium office spaces. However, increasing property prices and limited availability of large, contiguous spaces have posed challenges for new entrants.
Delhi-NCR, another major market, saw a mixed performance in Q1 2025. The region's vast market size and growing demand from the BFSI sector have driven leasing activities, but a slower pace of new completions has led to a tighter supply situation. This has resulted in higher rents and increased competition among tenants for available spaces.
The report also noted that the sustainability and green building certifications are becoming increasingly important for corporate occupiers. Many companies are now placing a higher premium on environmentally friendly office spaces, which aligns with their corporate social responsibility (CSR) goals and enhances their brand image. This shift in preference is likely to drive more developers to incorporate sustainable features in their projects.
In conclusion, while the completion of new office spaces in Q1 2025 saw a decline, the leasing activity remained strong, especially in tech and IT hubs like Bengaluru, Pune, and Hyderabad. The real estate sector continues to adapt to changing market dynamics, and the growing emphasis on sustainability is expected to shape future developments. Companies and developers alike are focusing on creating high-quality, sustainable office spaces that meet the evolving needs of the business community.
Boilerplate:
Cushman & Wakefield (C&W) is a leading global real estate services firm with over 53,000 employees in 70 countries. The company provides a wide range of services, including property management, facility management, real estate investment, and development. C&W is committed to delivering innovative solutions that help clients achieve their business goals and create value in the real estate market.
Frequently Asked Questions
What was the total office space completion in Q1 2025?
The total office space completion in Q1 2025 was 10.7 million square feet.
Which city accounted for the highest percentage of GCC leasing?
Bengaluru accounted for 37% of the Gross Commercial Construction (GCC) leasing activity.
What factors are driving leasing activity in tech and IT hubs?
Robust infrastructure, a large pool of skilled professionals, and lower operational costs are driving leasing activity in tech and IT hubs like Bengaluru, Pune, and Hyderabad.
How are sustainability and green building certifications impacting the real estate market?
Sustainability and green building certifications are becoming increasingly important for corporate occupiers, driving developers to incorporate more sustainable features in their projects.
What are the challenges faced by new entrants in the Delhi-NCR market?
New entrants in the Delhi-NCR market face challenges such as higher property prices and limited availability of large, contiguous spaces, leading to a tighter supply situation.
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