Top seven cities record 17.9 million sq ft of office space absorption in Q1 2025, Bengaluru tops the list

Office space absorption across the top seven cities reached 17.9 million sq ft in Q1 2025, marking a 34% year-on-year increase, according to a report by Vestian. Bengaluru led the growth with 4.08 million sq ft absorbed—a 56% rise from the previous year. Mumbai followed closely at 3.99 million sq ft, while Kolkata, despite recording the lowest absorption at 0.23 million sq ft, saw a 44% year-on-year increase.

Bengaluru led the absorption by Global Capability Centres among the top seven cities with a 39% share in Q1 2025, registering a 39% Qoq and 119% YoY increase in value terms.

Pune reported an annual increase of 276% in absorption, with its pan-India share rising from 5% in Q1 2024 to 15% in Q1 2025. Conversely, Chennai witnessed the highest annual drop of 52% with its share declining from 25% to 9% during the same period, according to the report.

Also Read: Bengaluru witnesses 28% drop in gross office space leasing in Q1 2025: C&W

Pan-India construction activities slowed down by 39% in a quarter and 12% over the previous year. This slowdown can be attributed to the absence of new supply in Hyderabad and minimal supply additions in Chennai, Mumbai, and Kolkata during Q1 2025, Vestian said.

“Despite a quarterly decline of 3% in value terms, the share of Bengaluru in pan-India absorption increased to 23% in Q1 2025 from 19% a quarter earlier. Similarly, the share of Mumbai also rose marginally by one percentage point to 22% in Q1 2025 despite an 11% decline in value terms,” it said.

The report showed that Bengaluru led new completions in Q1 2025 with a 37% share at 3.5 million sq ft, while Pune followed with a 31% share at 2.9 million sq ft. Bengaluru’s share increased from 21% in the previous quarter, whereas Pune’s share rose from 15%.

New completions in NCR doubled to 2.6 million sq ft in Q1 2025 compared to the same period a year ago and Mumbai recorded a marginal 0.3 million sq ft of new completions in Q1 2025.

The top seven cities include Bengaluru, Hyderabad, Chennai, Mumbai, Kolkata, Pune, and NCR.

Also Read: Bengaluru tops office leasing 2024, sees record leasing of nearly 21.8 million sq ft: Report

Hyderabad recorded the highest office space vacancy

As of Q1 2025, Hyderabad had 28 million sq ft of vacant space, the highest among the top seven cities. Despite robust demand, Vestian said the stock is expected to rise further in 2025 due to a strong pipeline of upcoming supply in the city.

Since 2020, the city has recorded 59 million sq ft of new completions and 48.5 million sq ft of office space absorption.

“India’s office market maintained its growth momentum in Q1 2025, driven by sustained demand across the major office markets in India. Even though the absorption decreased over the previous quarter, demand for office spaces by GCCs, IT-ITeS, BFSI, and Flex Spaces is expected to swell in the forthcoming quarters,” Shrinivas Rao, FRICS, CEO, Vestian, said.