India Office Space Market, By Building Type (Retrofits, New Buildings), By End User (IT & Telecommunications, Media & Entertainment, Retail, Consumer Goods, Others) By Region, Competition, Forecast & Opportunities, 2021-2031F

Market Overview

India Office Space Market was valued at USD 273 Billion in 2025 and is expected to reach USD 414 Billion by 2031 with a CAGR of 7.04% during the forecast period. 

Office space refers to a designated area or environment specifically designed and furnished for the purpose of conducting professional or business-related activities. It typically includes workstations, desks, meeting rooms, and common areas that facilitate collaboration, communication, and productivity among employees. Office space can range in size and layout, from open-plan designs to private offices, depending on the needs and structure of the organization.

The primary function of office space is to provide a comfortable, efficient, and organized setting for individuals and teams to perform tasks such as administration, planning, communication, and problem-solving. Modern office spaces often include technological infrastructure, such as internet connectivity, telephone systems, and computers, which support daily business operations.

There are various types of office spaces available, including traditional leased offices, co-working spaces, serviced offices, and virtual offices. Each type offers different levels of flexibility, cost, and services to accommodate businesses of varying sizes and industries.

In addition to functionality, office space also influences employee morale, company culture, and overall productivity. Well-designed office environments can improve focus, enhance creativity, and foster a sense of community. As work styles evolve, office spaces continue to adapt to support hybrid and remote work models, emphasizing flexibility and innovation.

Key Market Drivers

Rapid Growth of the IT and Technology Sector

The Indian office space market is strongly influenced by the expansion of the Information Technology (IT) and technology-enabled services (ITeS) sector. As one of the largest employers in India, the IT sector continues to be a dominant driver of office demand, especially in major cities like Bengaluru, Hyderabad, Pune, and Chennai. Global technology giants and domestic IT firms prefer to establish large campuses or lease significant amounts of Grade-A office space to accommodate expanding teams and infrastructure.

India’s skilled labor pool, cost-effective operations, and favorable time zone for Western clients have contributed to the continued influx of technology investments. Additionally, the country’s emergence as a hub for software development, fintech, cloud services, and AI-based solutions means that demand for technologically advanced workspaces is rising. These companies typically look for office environments that offer modern amenities, high-speed connectivity, and scalable layouts that support agile working methods.

The hybrid work trend has also pushed tech companies to reconsider their real estate strategies. While remote work has reduced the need for fixed desks, it has not eliminated the need for collaborative and innovation-friendly spaces. As a result, demand is shifting towards flexible, well-designed workspaces that promote collaboration, even within traditional IT setups. Furthermore, many IT companies are expanding their presence beyond Tier-1 cities to access a broader talent base and reduce operating costs. This is boosting office space demand in emerging Tier-2 cities such as Coimbatore, Jaipur, and Bhubaneswar. The digital economy’s rise, driven by e-commerce, digital payments, and startups, is only adding to this momentum. The Indian IT and technology sector contributes over 8% to India’s GDP, with the broader services sector contributing significantly to the economy. In FY 2022-2023, India's IT exports were valued at approximately USD 150 billion

Expansion of Global Capability Centers (GCCs)

The rapid rise of Global Capability Centers (GCCs), also known as Global In-house Centers (GICs), is another key factor driving India’s office space market. Multinational corporations (MNCs) across industries such as banking, pharmaceuticals, automotive, and retail are setting up or expanding their offshore delivery centers in India. These centers perform a range of strategic and high-value functions, including research and development, data analytics, engineering, product design, and IT services.

India is an attractive destination for GCCs due to its vast pool of English-speaking professionals, cost-efficiency, and increasing infrastructure sophistication. Cities like Bengaluru, Hyderabad, and Gurgaon have become top choices for these centers due to their modern office parks, good connectivity, and access to highly skilled professionals. Many of these GCCs require premium office spaces that offer a secure, collaborative, and technologically advanced work environment.

A notable trend is that GCCs are evolving from back-end support centers to strategic hubs that contribute to core business outcomes. As their role within parent organizations becomes more critical, the demand for high-quality office space that supports innovation and employee well-being has surged. MNCs are also keen on leasing long-term spaces in SEZs (Special Economic Zones) and IT parks that offer regulatory benefits and robust infrastructure.

The impact of this growth is not limited to Tier-1 cities. Many GCCs are exploring Tier-2 cities to tap into untapped talent and reduce costs, thereby diversifying the demand for office space across new geographies. Moreover, the competitive real estate market and developer focus on building Grade-A office complexes further encourage global firms to invest in high-quality workplaces.

In essence, the expansion of GCCs is transforming the demand landscape of the Indian office market, encouraging premium developments and contributing significantly to the country’s commercial real estate growth. India has become a global hub for GCCs, with over 1,300 centers operating across major cities like Bengaluru, Hyderabad, Pune, and Chennai. The number of GCCs in India is growing at a rapid pace, with new centers being established in Tier-2 cities as well.

Rise of Flexible and Co-working Spaces

The increasing popularity of flexible and co-working spaces is a transformative driver for India’s office space market. As businesses shift toward more agile operations, traditional long-term leases are giving way to shorter, scalable, and more cost-efficient real estate options. This trend is being embraced by startups, SMEs, freelancers, and even large corporations seeking decentralized work models or hybrid work solutions.

Flexible workspaces offer plug-and-play models, where businesses can quickly move in, start operations, and scale up or down based on their needs. This is particularly appealing in times of economic uncertainty or rapid growth, where adaptability becomes a key business advantage. Providers such as WeWork, Awfis, Smartworks, and others have capitalized on this demand by offering customizable office layouts, shared amenities, and community-driven work cultures.

Post-pandemic, even larger enterprises are incorporating co-working spaces into their real estate strategies. Many companies are adopting a hub-and-spoke model where a central office is supported by smaller, flexible hubs across various cities. This allows them to maintain presence while offering employees the option to work closer to home. It also supports talent acquisition and retention, especially in the era of remote and hybrid work. Additionally, co-working spaces have evolved beyond simple desk-sharing models. They now offer enterprise-grade infrastructure, private offices, meeting rooms, and wellness features such as biophilic design, ergonomic furniture, and fitness zones. The tech-enabled nature of these workspaces — with access controls, booking apps, and virtual collaboration tools — adds to their appeal.

The rise of the gig economy, digital entrepreneurship, and freelance culture in India has further fueled this trend. As more professionals seek autonomy without sacrificing professionalism or access to a productive environment, flexible workspaces offer the perfect middle ground. Major cities like Bengaluru, Delhi NCR, Mumbai, and Hyderabad are the key hubs for flexible office spaces. However, Tier-2 cities such as Chandigarh, Pune, and Chennai are also witnessing increased demand.

Government Initiatives and Infrastructure Development

Government policies and infrastructure development have played a critical role in shaping the growth of the Indian office space market. Central and state-level initiatives aimed at boosting investment, improving urban infrastructure, and promoting business-friendly environments have encouraged both domestic and international companies to establish operations in Indian cities.

One of the most impactful initiatives has been the development of Special Economic Zones (SEZs), which offer fiscal incentives, regulatory relaxations, and world-class infrastructure for businesses. SEZs have attracted numerous IT, ITeS, and manufacturing firms, resulting in concentrated demand for commercial office space. Similarly, the Smart Cities Mission has helped upgrade urban infrastructure, transportation networks, and digital connectivity, making several cities more attractive for commercial real estate investments.

Programs like ‘Make in India’, ‘Startup India’, and the Production Linked Incentive (PLI) scheme have encouraged the setup of new businesses and manufacturing hubs, which in turn have increased demand for adjacent office spaces — particularly in cities like Pune, Ahmedabad, and Noida. These policy-driven investments create employment opportunities, draw in ancillary services, and require robust administrative and operational setups, all of which contribute to office space demand.

Infrastructure improvements — including metro rail expansions, expressway projects, and airport modernizations — have a direct impact on the viability of office locations. As connectivity improves, formerly peripheral areas become accessible and desirable, leading to the development of new business districts. This decentralization helps reduce pressure on saturated city centers while opening up new markets for developers. Furthermore, Real Estate Investment Trusts (REITs) have brought transparency and institutional funding into the office real estate sector. The listing of India’s major REITs has not only boosted investor confidence but also spurred the development of more Grade-A office properties, ensuring better supply for growing demand. The Indian government has eased regulations around Foreign Direct Investment (FDI) in the real estate sector, allowing for 100% FDI under the automatic route for development projects. This initiative has attracted international investors, driving new office space developments, especially in major cities.

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Key Market Challenges

Navigating the Hybrid Work Transition

One of the most pressing challenges for the Indian office space market is adapting to the long-term impact of hybrid work models. After the COVID-19 pandemic forced a mass shift to remote work, many companies realized that complete physical office attendance was no longer necessary for business continuity or productivity. As a result, organizations across sectors—from IT and finance to consulting—are now adopting hybrid models where employees split time between home and office.

This shift has significantly altered demand patterns for commercial office space. While some firms are downsizing to reduce costs, others are reconfiguring their spaces to prioritize collaboration zones, wellness areas, and shared meeting facilities over traditional desk setups. For landlords and developers, this means a drop in demand for conventional office layouts and a rise in demand for more flexible, modular spaces. However, the transition to hybrid is not uniform across all industries or cities. Companies in Tier-1 cities are quicker to embrace it, while others in manufacturing or compliance-heavy sectors still require physical presence. This inconsistency creates uncertainty in long-term leasing decisions, making it difficult for real estate developers to plan future projects with confidence.

Office utilization rates have become unpredictable. Many firms now operate at reduced occupancy levels throughout the week, leading to underutilized spaces that still incur high maintenance and operational costs. Tenants are pushing for shorter lease tenures, rent renegotiations, and more flexible terms—forcing landlords to revise traditional lease structures and revenue models. Additionally, from a cultural standpoint, Indian companies have long valued in-person work for supervision, training, and team cohesion. Transitioning to hybrid without disrupting productivity or company culture remains a delicate balancing act.

Supply-Demand Mismatch and Infrastructure Bottlenecks

Another major challenge in the Indian office space market is the mismatch between supply and demand, often exacerbated by infrastructure limitations in high-growth urban centers. While major cities like Bengaluru, Mumbai, and Delhi NCR continue to see high interest from occupiers, the supply of quality, well-located office space often lags behind the actual requirements of businesses.

Many developers struggle to deliver projects on time due to complex regulatory processes, land acquisition issues, or lack of coordination among municipal bodies. Even when new office buildings are completed, they may not meet the modern expectations of occupiers, such as smart building features, sustainability certifications, or flexible floor plans. This leads to a glut of outdated spaces in some markets, even as demand for premium, Grade-A office space grows.

Traffic congestion, poor public transportation networks, and inconsistent civic infrastructure—such as water, power, and waste management—also hinder the growth of commercial hubs. In cities like Bengaluru, the lack of adequate last-mile connectivity often makes otherwise prime office locations less attractive to tenants and employees alike. As a result, companies may choose to limit expansion or seek alternatives in smaller cities, reducing absorption in traditional markets.

Another aspect of the supply-demand mismatch lies in over-speculation. In anticipation of rising demand, developers in the past have added excessive supply in certain micro-markets without adequate demand support, leading to high vacancy rates and pressure on rentals. At the same time, emerging business districts that could benefit from more office space often face land-use restrictions or infrastructure delays, preventing timely development.

For international investors and REITs, these inconsistencies pose significant risks. They need predictable returns and occupancy levels, which are hard to achieve in an environment where infrastructure and urban planning do not keep pace with business needs.

To address this, better coordination between private developers, city planners, and government bodies is essential. Incentivizing infrastructure-led development and streamlining approval processes could go a long way in correcting imbalances.

Key Market Trends

Shift Toward Sustainable and Green Buildings

A significant trend in the Indian office space market is the growing emphasis on sustainability and green-certified buildings. As businesses become more environmentally conscious and ESG (Environmental, Social, and Governance) metrics gain prominence globally, demand for energy-efficient, eco-friendly office spaces has risen sharply. Developers are now prioritizing green building certifications such as LEED (Leadership in Energy and Environmental Design) and IGBC (Indian Green Building Council) to attract top-tier tenants.

Modern occupiers, especially multinationals and large domestic firms, seek office environments that align with their sustainability goals. This includes buildings that reduce carbon footprint, minimize energy and water consumption, and promote employee well-being through improved air quality, natural lighting, and use of sustainable materials. Additionally, such buildings often incorporate smart systems for energy monitoring, waste management, and renewable energy integration, such as solar panels and rainwater harvesting.

This trend is not only environmentally driven but also financially strategic. Sustainable buildings tend to offer long-term operational savings and attract premium rents due to their efficiency and appeal to corporate tenants. Moreover, companies that operate from green-certified buildings often gain a reputational advantage, especially when disclosing sustainability practices to investors or customers.

Indian developers are responding by integrating green elements into both new constructions and retrofitting older buildings to meet eco-standards. Government initiatives promoting energy efficiency, along with rising investor focus on ESG-compliant portfolios, are further accelerating this shift.

Emergence of Tier-2 Cities as Office Hubs

The expansion of office space demand beyond traditional metros to Tier-2 cities is becoming a defining trend in the Indian commercial real estate landscape. Cities such as Jaipur, Coimbatore, Chandigarh, Indore, Bhubaneswar, and Kochi are emerging as attractive destinations for office development due to their growing talent pools, lower operational costs, and improving infrastructure.

This shift is driven by several factors. First, rising rental and occupancy costs in Tier-1 cities like Bengaluru, Mumbai, and Delhi NCR have prompted companies—particularly in IT, BPO, and startup sectors—to explore more cost-effective locations. Second, the widespread adoption of remote and hybrid work models during the pandemic has enabled firms to hire talent from across the country, reducing dependence on physical proximity to headquarters. Additionally, many Tier-2 cities are investing heavily in digital and physical infrastructure, such as metro connectivity, airport upgrades, and IT parks. State governments are also offering incentives to attract IT and ITeS firms, further boosting business interest.

Global Capability Centers (GCCs) and domestic tech firms are already beginning to set up satellite offices or full-fledged campuses in these cities. Flexible workspace providers are also entering these markets, catering to freelancers, startups, and small businesses that require plug-and-play options.

While Tier-2 cities still face challenges such as limited availability of Grade-A buildings and a shortage of experienced property management services, the potential for long-term growth is undeniable. For developers and investors, these markets offer first-mover advantage and less competition, with the potential for strong returns as demand catches up.

Segmental Insights

Building Type Insights

The New Buildings held the largest market share in 2025.  New buildings dominate the Indian office space market due to their ability to meet evolving business needs, modern infrastructure standards, and the expectations of both occupiers and investors. As companies increasingly prioritize efficiency, sustainability, and employee well-being, newly constructed office buildings are better equipped to deliver on these fronts compared to older, retrofitted structures.

One key reason for this dominance is corporate demand for Grade-A spaces, which offer superior facilities, large floor plates, better safety standards, and enhanced energy efficiency. These features are more readily incorporated during new construction than through retrofitting older buildings. Multinational companies, IT/ITES firms, and Global Capability Centers (GCCs) specifically seek such high-quality spaces to attract talent and support business continuity. Furthermore, new office developments are often located in emerging business corridors and IT parks with modern infrastructure, proximity to residential hubs, and improved connectivity. These locations are preferred over older central business districts where space is limited and retrofitting options are constrained.

The rise of Real Estate Investment Trusts (REITs) and growing institutional interest in India’s commercial real estate sector also fuels demand for new buildings. Investors prefer stable, compliant, and scalable assets, which are typically delivered through newly built, well-managed office campuses. Additionally, new buildings are more adaptable to post-pandemic workplace needs, such as touchless systems, flexible layouts, better ventilation, and smart technology integration. As hybrid work becomes the norm, companies are redesigning office spaces with collaboration zones and wellness areas—easier to implement in new construction than in older layouts.

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Regional Insights

South India held the largest market share in 2025. South India has become a dominant force in the Indian office space market due to a combination of economic, infrastructural, and demographic factors that have driven significant demand for commercial real estate in cities like Bengaluru, Hyderabad, Chennai, and Kochi.

Bengaluru, often referred to as the "Silicon Valley of India," has long been the hub for IT and technology companies. This city, along with Hyderabad and Chennai, is home to numerous global IT giants, including Accenture, IBM, and Microsoft, as well as a thriving startup ecosystem. The concentration of technology and knowledge-driven businesses has created a consistent demand for modern office spaces, particularly in the form of large campuses, IT parks, and tech-focused office developments.

South India boasts a large and diverse talent pool, especially in sectors such as IT, biotechnology, automotive, and pharmaceuticals. The region's strong educational infrastructure, with top-tier institutions like the Indian Institute of Technology (IIT) Madras and the Indian Institute of Management (IIM) Bengaluru, fuels the demand for skilled professionals. This concentration of talent makes the region an attractive destination for both domestic and international companies looking to tap into high-quality human resources.

Compared to the expensive office markets of Mumbai and Delhi NCR, South Indian cities like Bengaluru and Hyderabad offer relatively lower real estate costs. These cities provide high-quality office spaces at competitive rental rates, making them an attractive option for startups, SMEs, and large enterprises seeking cost-effective solutions.

The development of world-class infrastructure, including modern office parks, tech hubs, and improved connectivity (airports, metro systems, expressways), has further fueled the growth of South India’s office space market. Cities like Hyderabad and Bengaluru have become global business destinations, with improved ease of doing business and significant government support.

Recent Developments

• In March 2025, DLF is set to invest USD 710 Million to develop 7.5 million square feet of office and retail space in Gurugram. This new project will expand the company’s portfolio in the rapidly growing business hub of the National Capital Region (NCR). The development is expected to cater to increasing demand for commercial properties, offering modern, sustainable office and retail facilities to meet the needs of businesses and consumers in the region.
• In March 2025, The Trump Organization has launched its first commercial project in India, the USD 295 million "Trump World Center" in Pune. This prestigious development marks a significant entry into the Indian real estate market, offering luxury residential and commercial spaces. The Trump World Center Pune aims to set a new standard for high-end living and business environments, catering to the growing demand for premium properties in the city’s expanding commercial landscape.

Key Market Players

• WeWork Inc.
• CBRE Group, Inc.
• JLL (Jones Lang Lasalle Incorporated)
• Colliers International Group Inc.
• Savills Plc
• Keller Williams Realty, Inc.
• Cushman & Wakefield PLC

Report Scope:

In this report, the India Office Space Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• India Office Space Market, By Building Type:

o   Retrofits

o   New Buildings

• India Office Space Market, By End User:

o   IT & Telecommunications

o   Media & Entertainment

o   Retail

o   Consumer Goods

o   Others

• India Office Space Market, By Region:

o   South India

o   North India

o   West India

o   East India   

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the India Office Space Market.

Available Customizations:

India Office Space Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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