IT-ITeS Leads Office Absorption; Flex Spaces Rise to 14 per cent: Vestian

25 Jul 2025 CW Team

The IT-ITeS sector dominated the market with 9.4 million sq ft of absorption in Q2, representing 50 per cent of the national total. Key demand clusters included Yeshwantpur (Bengaluru), Nanakramguda (Hyderabad), and Airoli (Mumbai).

Flex spaces continued their upward trajectory, accounting for 14 per cent of total absorption, up from 9 per cent in Q1. The segment saw a 68 per cent rise in absorbed area, reaching 2.63 million sq ft. Bengaluru, Chennai and Hyderabad contributed nearly 80 per cent of this, highlighting growing demand for flexible workspaces in these markets.

The top seven cities recorded 36.75 million sq ft of office absorption in H1 2025, marking a 21 per cent increase over the same period last year. With this pace, Vestian projects absorption to exceed 75 million sq ft in 2025—potentially the highest annual total on record.

“India’s office market continued to grow in Q2 2025, largely driven by robust absorption in major cities like Bengaluru, Hyderabad, and Mumbai. As more enterprises are transitioning back to in-office operations and several grade-A office projects are planned to be completed in the second half of 2025, the growth momentum is anticipated to continue with an increase in office utilisation ratio,” said Mr Shrinivas Rao, CEO, Vestian.

City-wise Highlights:

Bengaluru led with 5.62 Mn sq ft absorption, rising 38 per cent QoQ and 32 per cent Y-o-Y.
Hyderabad saw 3.56 Mn sq ft, up 34 per cent QoQ and 5 per cent Y-o-Y.
Mumbai recorded 3.45 Mn sq ft, down 14 per cent QoQ but up 2 per cent Y-o-Y.
Chennai reported 1.82 Mn sq ft, up 13 per cent QoQ and 4 per cent Y-o-Y.
NCR posted 2.62 Mn sq ft, down 4 per cent QoQ but up 130 per cent Y-o-Y.
Pune declined to 1.37 Mn sq ft, down 49 per cent QoQ and 52 per cent Y-o-Y.
Kolkata reached 0.35 Mn sq ft, marking a 52 per cent QoQ and Y-o-Y increase.

Q2 2025 Sector-wise Absorption Share (Pan-India):

IT-ITeS: 50 per cent (9.4 Mn sq ft)
Flex Spaces: 14 per cent (2.6 Mn sq ft)
BFSI: 6 per cent (1.1 Mn sq ft)
Others: 30 per cent (5.6 Mn sq ft)

(*Others include Aviation, Consulting, Retail, Healthcare, Infra, E-commerce, etc.)

India’s office space market witnessed sustained momentum in Q2 2025 with total absorption reaching 18.79 million sq ft—up 10 per cent year-on-year and 5 per cent quarter-on-quarter—according to Vestian Research. Southern cities led the surge, accounting for 59 per cent of total absorption, up from 46 per cent in Q1. The IT-ITeS sector dominated the market with 9.4 million sq ft of absorption in Q2, representing 50 per cent of the national total. Key demand clusters included Yeshwantpur (Bengaluru), Nanakramguda (Hyderabad), and Airoli (Mumbai). Flex spaces continued their upward trajectory, accounting for 14 per cent of total absorption, up from 9 per cent in Q1. The segment saw a 68 per cent rise in absorbed area, reaching 2.63 million sq ft. Bengaluru, Chennai and Hyderabad contributed nearly 80 per cent of this, highlighting growing demand for flexible workspaces in these markets. The top seven cities recorded 36.75 million sq ft of office absorption in H1 2025, marking a 21 per cent increase over the same period last year. With this pace, Vestian projects absorption to exceed 75 million sq ft in 2025—potentially the highest annual total on record. “India’s office market continued to grow in Q2 2025, largely driven by robust absorption in major cities like Bengaluru, Hyderabad, and Mumbai. As more enterprises are transitioning back to in-office operations and several grade-A office projects are planned to be completed in the second half of 2025, the growth momentum is anticipated to continue with an increase in office utilisation ratio,” said Mr Shrinivas Rao, CEO, Vestian. City-wise Highlights: Bengaluru led with 5.62 Mn sq ft absorption, rising 38 per cent QoQ and 32 per cent Y-o-Y. Hyderabad saw 3.56 Mn sq ft, up 34 per cent QoQ and 5 per cent Y-o-Y. Mumbai recorded 3.45 Mn sq ft, down 14 per cent QoQ but up 2 per cent Y-o-Y. Chennai reported 1.82 Mn sq ft, up 13 per cent QoQ and 4 per cent Y-o-Y. NCR posted 2.62 Mn sq ft, down 4 per cent QoQ but up 130 per cent Y-o-Y. Pune declined to 1.37 Mn sq ft, down 49 per cent QoQ and 52 per cent Y-o-Y. Kolkata reached 0.35 Mn sq ft, marking a 52 per cent QoQ and Y-o-Y increase. Q2 2025 Sector-wise Absorption Share (Pan-India): IT-ITeS: 50 per cent (9.4 Mn sq ft) Flex Spaces: 14 per cent (2.6 Mn sq ft) BFSI: 6 per cent (1.1 Mn sq ft) Others: 30 per cent (5.6 Mn sq ft) (*Others include Aviation, Consulting, Retail, Healthcare, Infra, E-commerce, etc.)

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