New office space completions in Q1 2025 touch 10.7 mn sq ft, down by 13% YoY: C&W Report

The total new office completions in the first quarter of 2025 stood at 10.7 million sq ft (msf), down by 13% YoY and 27% QoQ, falling short of expectations due to delays in occupancy certifications and project timelines, according to a report by Cushman and Wakefield.

Bengaluru (3.28 msf), Pune (3.21 msf), and Delhi-NCR (2.71 msf) contributed a combined 86% (9.2 msf) of the new completions. Hyderabad recorded 1.32 msf of completions, while Mumbai registered 0.18 msf. Cities like Chennai, Kolkata and Ahmedabad recorded no new supply, resulting in lower vacancy rates and higher rentals in these markets, the report said.

"Supply constraints and strong occupier demand in the first quarter of the year across India’s top eight office markets have resulted in a drop in vacancy rate by 55 basis points (bps) to 15.7% from 16.25% in Q4 2024," the report said.

Mumbai recorded the largest quarter-on-quarter drop in vacancy, down by 227 basis points. Kolkata followed with a 140-basis-point decline. Except for Bengaluru and Pune, all major markets experienced a decrease in vacancy rates due to supply shortages.

"While we remain watchful of evolving global economic conditions, India’s position as the global hub for tech, R&D, and innovation continues to strengthen. The strong performance of the GCC segment—now contributing over 30% of gross leasing—underscores this confidence, and we expect this trajectory to continue with more greenfield entries and expansion mandates," Anshul Jain, Chief Executive, India, SEA & APAC Tenant Representation, said.

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Office leasing up by 5% in Q1 2025

The report said that Q1 2025 recorded a gross leasing volume (GLV) of 20.3 msf in Q1 2025—a 5% increase compared to the same period last year. This figure aligns with the two-year average of 20 msf per quarter.

Fresh leasing, which refers to new deals rather than renewals, accounted for nearly 80% of total activity for the third straight quarter, showing continued occupier expansion.

Bengaluru (4.86 msf) and Mumbai (4.31 msf) led the leasing activity, followed by Pune (3.49 msf), Delhi-NCR (2.75 msf), Hyderabad (2.59 msf), and Chennai (1.97 msf). Kolkata and Ahmedabad recorded lower leasing volumes at 0.26 msf and 0.07 msf, respectively.

Net absorption—the amount of office space newly occupied—reached 13.4 msf, up 20% year-on-year and the third-highest quarterly figure on record. Delhi-NCR, Mumbai, and Bengaluru together accounted for 63% of this total. Pune recorded its highest-ever quarterly net absorption, while Delhi-NCR saw its strongest performance since Q4 2019.

Also Read: Gross office leasing touches 66.7 mn sq ft in Jan-Sep period, to cross 80 mn sq ft in 2024

Despite limited new supply, the outlook remains positive, with continued demand expected to keep vacancy levels tight and rental growth steady in key markets, the report said.

"In terms of sectoral demand, the IT-BPM sector retained its position as the largest occupier, accounting for 29% of GLV. BFSI followed at 22%, while flex space operators maintained a steady 13% share. Global Capability Centres (GCCs) grew their share to 31%, up from 28% in 2024. Bengaluru accounted for 37% of GCC leasing, with Pune and Hyderabad recording significant quarter-on-quarter growth," it added.