Hyderabad and Kolkata have experienced significant declines in office leasing activity during the first quarter of 2025, contrasting with positive growth in other major cities. According to a report released by Colliers India, this trend has raised concerns in the commercial real estate sector.
Hyderabad
Office space leasing in Hyderabad dropped by 41%, with transactions totaling 1.7 million square feet in Q1 2025, compared to 2.9 million square feet during the same period last year. Limited availability of premium office spaces and shifting preferences among global firms are cited as possible reasons behind the decline.
Kolkata
Kolkata saw an even sharper decline, with leasing activities falling by 50%. Only 1 million square feet were leased in Q1 2025, compared to 2 million square feet in the first quarter of 2024. The city has struggled to compete with more established hubs that offer greener and tech-ready spaces.
National Perspective
Across India’s top seven cities, gross leasing totaled 15.9 million square feet in Q1 2025, marking a 15% growth from 13.8 million square feet the previous year. Cities such as Chennai, Pune, and Delhi-NCR witnessed robust demand, with Chennai reporting a 39% increase and Pune leasing activity growing by 50%.
Tech companies, BFSI (banking, financial services, and insurance) firms, and manufacturing organizations dominated leasing activity, accounting for a significant proportion of transactions. Co-working operators also played a key role, catering to small companies through sub-leasing arrangements.
Outlook for 2025
The demand for Grade-A office spaces remains strong in key markets, driven by corporate expansions and positive domestic economic growth. As per Colliers India, the focus on sustainability and the growth of technology and engineering firms are expected to support office demand throughout the year.
