Bengaluru, India, 19th June 2025: India’s office market has undergone a transformative shift, amidst continuous demand scale up in the last few years. Interestingly, high-activity micro markets across the top seven cities of the country have been witnessing consistently high demand & supply since 2020. These high-activity micro markets collectively accounted for two-thirds & three-fourths of India’s Grade A office demand & supply respectively since 2020. Of these, 4 high-activity micro markets are in Bengaluru, 3 each in Delhi NCR & Pune, 2 each in Chennai & Hyderabad, and 1 in Mumbai.
High-activity office micro markets: A snapshot
|
|
Stock in msf (as of Q1 2025) |
Demand in msf (2020-Q1 2025) |
New supply in msf (2020-Q1 2025) |
|
Overall office market* |
797.9 |
255.1 |
226.6 |
|
15 high-activity micro markets |
451.2 |
166.8 |
172.2 |
|
Share of high-activity micro markets |
57% |
65% |
76% |
Source: Colliers
Note: Data pertains to Grade A office buildings only | Gross absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed | *Top 7 cities includes-Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai and Pune
These high active micro markets are spread across secondary and peripheral business districts (SBDs & PBDs) and will continue to drive India office market over the next few years amidst city expansions, ongoing infrastructure developments and evolving work models, according to the latest report by Colliers – “India Office: Micro market insights”. While the existing high-activity micro markets will continue to grow, other emerging micro markets too are expected to witness considerable traction and increasingly compliment the larger micro markets. Each of these high-activity micro markets are likely to witness at least 1 million sq ft of average annual demand & supply and collectively drive more than 80% of the office space demand and new supply in the next few years. In addition to demand and supply, the report also features leading micro markets across multiple facets of commercial real estate in India –rentals, vacancy, along with aspects such as sectoral focus, Global Capability Center (GCC) hubs, flex & green penetration, REITability etc.
India’s high-activity office micro markets
|
Micro market |
City |
Stock in msf (as of Q1 2025) |
Demand in msf (2020-Q1 2025) |
New supply in msf (2020-Q1 2025) |
Vacancy in % (as of Q1 2025) |
WAQ Rentals in INR/sf/month (as of Q1 2025) |
|
ORR |
Bengaluru |
91.5 |
32.7 |
26.9 |
10.6% |
108.1 |
|
SBD |
Hyderabad |
66.4 |
29.1 |
27.9 |
11.7% |
93.9 |
|
Whitefield |
Bengaluru |
49.3 |
16.6 |
16.2 |
18.2% |
67.6 |
|
Off SBD |
Hyderabad |
43.9 |
10.4 |
28.4 |
39.6% |
70.5 |
|
Noida Expressway |
Delhi NCR |
25.8 |
8.4 |
11.9 |
23.8% |
65.9 |
|
SBD 1 |
Bengaluru |
24.4 |
9.1 |
4.7 |
7.0% |
148.1 |
|
OMR Zone 1 |
Chennai |
22.8 |
11.2 |
4.5 |
11.0% |
99.5 |
|
Andheri East |
Mumbai |
20.7 |
5.1 |
4.0 |
9.7% |
148.2 |
|
Gurugram NH 48 |
Delhi NCR |
19.3 |
7.7 |
7.6 |
15.0% |
147.9 |
|
North |
Bengaluru |
17.8 |
7.2 |
11.5 |
38.5% |
72.7 |
|
Golf Course Extn. Road |
Delhi NCR |
16.0 |
6.3 |
7.1 |
27.2% |
91.0 |
|
Kharadi |
Pune |
15.9 |
5.8 |
6.4 |
15.6% |
90.5 |
|
CBD |
Pune |
15.5 |
4.3 |
4.7 |
17.7% |
105.9 |
|
MPR |
Chennai |
12.4 |
6.8 |
5.2 |
10.6% |
82.9 |
|
Baner-Balewadi |
Pune |
9.5 |
6.1 |
5.2 |
6.7% |
90.6 |
Source: Colliers
Note: Data pertains to Grade A office buildings only | Gross absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed | Weighted Average Quoted (WAQ) Rents are in INR per square feet per month
for warm shell offices and do not include common area maintenance (CAM) or taxes| Top 7 cities includes-Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai and Pune
Micro market definition-
Bengaluru: Outer Ring Road (ORR) stretches from KR Puram to Hebbal and Sarjapur JN to Marathahalli; Whitefield includes Brookfield, Whitefield and Hoodi; Secondary Business District 1(SBD 1) includes Koramangala, CV Raman Nagar, IRR, Indiranagar, Old Airport Road, Old Madras Road, Rajajinagar and others; North Bengaluru includes Bellary Road, Hebbal, Hennur, Thanisandra Road,Yelahanka, Yeshwanthpura
Chennai: OMR Zone 1 includes Old Mahabalipuram Road Pre-Toll: Madhya Kailash – Perungudi; MPR – Mount-Poonamallee High Road
Hyderabad: Secondary Business District (SBD) includes Kondapur, HITEC City, Raidurg, Madhapur, etc.; Off SBD includes Gachibowli, Nanakramguda, Financial District, Kokapet, etc.
Mumbai: Andheri East includes Andheri, Andheri-Kurla Road, Vile Parle, Chandivali
Pune: Central Business District (CBD) includes Bund Garden Road, Camp, FC Road, JM Road, Koregaon Park, Koregaon Park Annex, Kalyani Nagar, Shivaji Nagar, Raja Bahadur Mills Road, Senapati Bapat Road, Wakdewadi, Yerwada; Baner-Balewadi includes Aundh, Baner, Balewadi, Bavdhan, Pashan
“India’s office market is poised for a steady strong growth, led by 15-20 high-activity micro markets. While some of these micro markets are already established commercial real estate hubs, emerging micro markets can potentially scale up and witness heightened traction in the upcoming years. Annual demand and supply in each of these high activity micro markets is likely to exceed one million sq ft, driving contours of commercial real estate in India. Interestingly, India will continue to be strategically positioned in terms of rental arbitrage, with more than half of the Grade A demand expected in micro markets having sub or near dollar rentals,” said Arpit Mehrotra, Managing Director, Office services, India, Colliers.
59% of the flex space uptake & 73% of the GCC leasing since 2020 concentrated in top 10 micro markets
Of the total 38 million sq ft of flex space leasing across the top seven Indian cities since 2020, 59% corresponded to the top 10 micro markets. Within these, SBD-Hyderabad, ORR-Bengaluru & Baner-Balewadi, Pune cumulatively drove around one-third of the flex space uptake in India. Overall, the annual flex space demand in these top 10 micro markets has surged from 1.3 million sq ft in 2020 to 7.3 million sq ft in 2024 at a CAGR of 54%.
On the GCC front, nearly 70 million sq ft of GCC demand during the last five years has been concentrated in the top 10 micro markets, accounting for 73% of the total GCC leasing in India. Micro markets such as ORR, Whitefield, SBD 1 and North in Bengaluru, SBD & Off SBD in Hyderabad and OMR Zone 1 & MPR in Chennai, collectively have accounted for two-thirds of the country’s Grade A space uptake by GCCs since 2020. Interestingly, GCCs in India are spread across micro markets having a wide rental spectrum and continue to favor India on account of skilled talent availability, sectoral diversification and usage functionality of GCC hubs. Going ahead, global companies will continue to prefer having a presence in SBDs & PBDs of major Indian cities which are nearer to the employee catchment areas and have seen significant improvements in accessibility driven by infrastructure developments.
Mumbai & Delhi NCR dominate the list of micro markets with highest rentals and lowest vacancy levels
Although most micro markets in India have seen a rental appreciation compared to pre-pandemic levels, select micro markets in Mumbai and Delhi NCR continue to lead in terms of average rentals. BKC, CBD, Lower Parel, Worli-Prabhadevi, Goregaon/JVLR and Kalina in Mumbai and CBD, Aerocity, Golf Course Road & South Delhi in Delhi NCR feature prominently in the list of micro markets having highest rentals in India.
Similarly, almost 30% of the office micro markets in India have sub 10% vacancy levels, compared to the 16.2% vacancy at India level. In fact, owing to demand significantly outpacing supply in recent years, Goregaon/JVLR, CBD, Thane, LBS/Eastern Suburbs & BKC in Mumbai and Aerocity, Cybercity & MG Road in Delhi NCR, CBD in Bengaluru and Guindy in Chennai continue to have one of the lowest vacancy levels in the country.
“Interestingly, most of the micro markets which have seen high rental appreciation since 2020 had significantly high demand & supply as compared to the rest. Majority of these high-activity micro markets will continue to have potentially higher rental upside and are likely to lean towards landlords/developers. In addition to the preference for premium offerings, occupiers will increasingly prefer sustainable elements and green certified office buildings. Consequently, average occupancy levels in green-certified buildings of these high-activity micro markets will be appreciably higher than occupancy levels of non-green certified buildings in respective micro markets,” said Vimal Nadar, National Director & Head of Research, Colliers India.
72% of Grade A inventory in top 10 micro markets is REIT-worthy
Of the 488 million sq ft of REIT-worthy office stock in India, 56% is in the top 10 micro markets. Interestingly, 275 million sq ft of Grade A inventory (as of Q1 2025) corresponding to 72% of the overall stock in these micro markets is already under REITs or has the potential to be listed as future REITs. In fact, key micro markets in Bengaluru (ORR & Whitefield) and Hyderabad (SBD & Off SBD) collectively hold 38% of India’s REIT-worthy office stock. These four micro markets cumulatively have more than 35 million sq ft of office stock already under existing REITs.