Office Space Supply Dwindles: Delhi-NCR and Mumbai See Significant Decline in New Completions

New supply of office space declined sharply in key property markets such as Delhi-NCR and Mumbai last year, even as demand for prime workspaces remained strong across India’s major cities, according to real estate consultant Colliers, PTI reported.

Delhi-NCR saw a 15 per cent fall in new office supply in 2025, while Mumbai recorded a steeper decline of 37 per cent, Colliers India said, adding that office demand outstripped fresh supply across India’s top seven cities, leading to lower vacancy levels. Colliers data showed that new office supply in Delhi-NCR fell to 7.4 million sq ft in 2025 from 8.7 million sq ft in the previous year. Mumbai saw fresh supply decline to 5.2 million sq ft from 8.3 million sq ft a year earlier.

Hyderabad also witnessed a drop, with new supply falling 21 per cent to 10.8 million sq ft from 13.7 million sq ft. In Kolkata, supply plunged 80 per cent to 0.1 million sq ft from 0.5 million sq ft in 2024. In contrast, Chennai, Bengaluru, and Pune saw an improvement in new office completions. Bengaluru recorded a 15 per cent rise in fresh supply to 17.5 million sq ft from 15.2 million sq ft. Chennai more than doubled its new supply to 4.5 million sq ft from 2.1 million sq ft, while Pune saw a more than two-fold jump to 11 million sq ft from 5.3 million sq ft.

Overall, the seven major office markets -- Bengaluru, Delhi-NCR, Mumbai, Hyderabad, Chennai, Pune, and Kolkata -- witnessed a 5 per cent rise in new office supply to 56.5 million sq ft in 2025, compared with 53.8 million sq ft in the preceding year. Office leasing activity also remained strong, with total absorption rising 6 per cent to 71.5 million sq ft last year from 67.2 million sq ft in 2024. With demand outpacing supply in recent times, overall vacancy levels fell by 49 basis points, while average rentals strengthened by up to 15 per cent YoY across major cities, Colliers India said.

Technology companies and the banking, financial services, and insurance (BFSI) sector continued to be the key drivers of office demand, while foreign firms setting up Global Capability Centres (GCCs) in India further supported absorption of prime office spaces. Major developers active in the office segment include DLF Ltd, Prestige Estates, K Raheja Group, Embassy Group, Sattva Group, and RMZ Group. India currently has four office asset-backed real estate investment trusts (REITs): Knowledge Realty Trust backed by Sattva Group and Blackstone, Mindspace Business Parks REIT sponsored by the K Raheja Group, Brookfield India Real Estate Trust, and Embassy Office Parks REIT.

Recently, Bengaluru-based Bagmane Group sponsored Bagmane Prime Office REIT filed draft papers with market regulator Sebi to raise up to Rs 4,000 crore through an initial public offering. REITs are investment vehicles that own or operate income-generating real estate, allowing investors to earn income without directly owning property.