Hyderabad reported 59.0 million sq ft of new completions and 48.5 million sq ft of absorption since 2020. The trend of new completions surpassing absorption for five consecutive years has led to a significant rise in vacant office stock. As of Q1 2025, the city holds 28 million sq ft of vacant stock, the highest among the top seven cities. Despite robust demand, the stock is expected to rise further in 2025 on the back of a strong pipeline of upcoming supply in the city. However, pan-India construction activities slowed down by 39% on quarter and 12% over the previous year, reaching 9.50 million sq ft in Q1 2025. 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.

Conversely, the first quarter of 2025 witnessed sustained leasing activities across the top seven cities amid global macroeconomic uncertainty. As a result, absorption rose by 34% in Q1 2025 compared to the same period a year earlier, reaching 17.96 million sq ft. This can be attributed to the significant increase in real estate activities in the western cities (Mumbai and Pune), with the share rising from 24% in Q1 2024 to 37% in Q1 2025.

Moreover, the sudden rise of artificial intelligence altered the growth trajectory of the IT industry. This could be substantiated by the continuous dominance of IT-ITeS sector in the absorption. The sector accounted for 34% of the pan-India absorption in Q1 2025 and 36% in the previous quarter.

Shrinivas Rao, FRICS, CEO, Vestian said, “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.”

City-wise analysis

• Bengaluru dominated pan-India absorption with 4.08 million sq ft in Q1 2025, closely followed by Mumbai with 3.99 million sq ft. Kolkata reported the lowest absorption of 0.23 million sq ft during Q1 2025, however, it increased by 44% on year and 289% over the previous quarter.
• 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.
• 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 stated above.
• Bengaluru led the absorption by GCCs among the top seven cities with 39% share in Q1 2025, registering a 39% QoQ and 119% YoY increase in value terms.
• While Bengaluru led new completions in Q1 2025 with 37% share, Pune followed with 31% share. 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. It also increased by 44% over the previous quarter.