Bengaluru: India’s office real estate market is being driven by 15 high-activity micro markets, which together have accounted for two-thirds of the country’s office demand and over three-fourths of new supply since 2020, according to a new report by Colliers titled “India Office: Micro Market Insights.”
Spread across major cities — including Bengaluru, Delhi NCR, Pune, Hyderabad, Chennai, and Mumbai — these micro markets are expected to each witness at least 1 million sq ft of average annual demand and new supply over the next few years. Their prominence marks a clear shift in how India’s commercial real estate ecosystem is evolving, both in scale and investment potential.
“These 15 micro markets have become the backbone of India’s Grade A office demand and are expected to remain the top destinations for occupiers and investors alike. In fact, annual demand and supply in each of these high-activity micro markets is likely to be at least 2-3 times the average of other markets,” said Arpit Mehrotra, Managing Director, Office Services, Colliers India.
Between 2020 and Q1 2025, these 15 micro markets accounted for 166.8 million sq ft of office space absorption out of the total 255.1 million sq ft across top Indian cities. At the same time, 172.2 million sq ft of new supply was added in these markets — amounting to 76% of the nationwide figure.
The high-activity micro markets include:
- Four in Bengaluru
- Three each in Delhi NCR and Pune
- Two each in Hyderabad and Chennai
- One in Mumbai
Notably, most of them fall within secondary and peripheral business districts (SBDs and PBDs), which are increasingly favored by Global Capability Centers (GCCs) and flex space operators.
Leading micro markets have also seen a major concentration of GCC and flexible workspace demand. Since 2020, 73% of GCC leasing — around 70 million sq ft — has been in the top 10 micro markets. These include:
- ORR, Whitefield, SBD 1 and North in Bengaluru
- SBD & Off SBD in Hyderabad
- OMR Zone 1 & MPR in Chennai
Flex space operators have similarly gravitated toward select commercial real estate hubs. Of the total 38 million sq ft of flex leasing in India since 2020, 59% took place in the top 10 micro markets. The segment has grown at a CAGR of 54%, with SBD Hyderabad, ORR Bengaluru, and Baner-Balewadi Pune leading flex space absorption.
While the overall vacancy in India’s Grade A office stock stands at 16.2%, nearly 30% of micro markets are operating at sub-10% vacancy levels. High-demand markets like CBD Bengaluru, Guindy in Chennai, and Delhi NCR’s Aerocity, Cybercity, and MG Road continue to show resilience with tight occupancies and rising rentals.
Micro markets in Mumbai and Delhi NCR dominate the list of most expensive locations, with:
- Andheri East, BKC, CBD, Lower Parel, Worli-Parabhadevi, Goregaon/JVLR, and Kalina in Mumbai
- Golf Course Road, South Delhi, Aerocity, and CBD in NCR
“Markets with significant rental appreciation post-2020 are also those with the highest demand and supply. This trend is expected to continue in favor of landlords, particularly in sustainable, green-certified office buildings,” said Vimal Nadar, Head of Research, Colliers India.
The report also notes that India has 488 million sq ft of REIT-worthy Grade A office space, of which 56% lies within the top 10 micro markets. Impressively, 72% of the stock in these micro markets is either already listed under REITs or has the potential to be listed. Key markets in Bengaluru and Hyderabad alone account for 38% of this REIT-qualified inventory.
With improving infrastructure, emerging locations are also gaining momentum and are likely to complement the established hubs. India’s competitive rentals — with nearly 60% of active markets offering near- or sub-dollar rates — make it an attractive destination for global occupiers seeking consolidation and cost arbitrage.
