Office space uptick expected as 85% of Indian firms plan expansion: CBRE

New Delhi [India], September 9 (ANI): India Inc. is set to become a key driver of office space demand over the next two years, with 85 per cent of domestic firms planning to expand their office footprint, according to CBRE's latest India Office Occupier Survey 2025.
The real estate consultancy firm highlights that approximately 85 per cent of domestic companies plan to expand their office portfolios over the next two years, up from 73 per cent in 2024.
This intent is underpinned by strong growth witnessed among key sectors and the accelerated pace of digitalisation across industries. As compared to the pre-COVID-19 period of 2018-19, domestic firms recorded a remarkable resurgence in office leasing during 2023-2024, registering an increase of 86 per cent.
Over the next two years, the demand for workspaces is also expected to be supported by an office-first policy and tighter hybrid arrangements.
The survey revealed that around 94 per cent of the companies prefer their employees to work from the office at least three days a week. Furthermore, about 52 per cent of the surveyed firms have a policy of working fully from the office, compared to 36 per cent in 2024.
Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, "As occupiers demand future-ready, high-performance workspaces, the industry must respond with strategic upgrades, sustainability-driven retrofits, and digitally integrated ecosystems."
The outcome of the survey added that the flexible workspace operators have firmly established themselves in India's office leasing landscape, consistently capturing a more than 15 per cent share in overall yearly absorption trends.
The survey indicated this momentum is expected to continue, with the number of companies allocating 26-50 per cent of their portfolio to flexible spaces set to rise by more than two-fold over the next two years.
Notably, 58 per cent of the surveyed small occupiers plan to place over 10 per cent of their office portfolio in flexible workspaces within the next two years, while the share of large occupiers doing so is projected to rise to 52 per cent by 2027, up from 33 per cent today.
Apart from flexible spaces, global capability centres (GCCs) continue to drive strong office space demand in India, accounting for a 35-40 per cent share in total annual absorption in recent years.
This momentum is underpinned by a strategic shift as GCCs transform from cost-efficient back-office units into high-value innovation hubs focused on R&D, AI, and core engineering.
Around 65 per cent of the surveyed GCCs are expected to expand their portfolios over the next two years, with BFSI, life sciences, and engineering & manufacturing emerging as the leading sectors. Leasing activity has reflected this growth trajectory, with the average GCC deal sizes also increasing to 108,000 sq ft in H1 2025 from 91,000 sq ft in 2024.
The report further highlighted that nearly 75 per cent of the surveyed GCCs have already defined ESG goals for their real estate portfolios, reflecting the growing prominence of sustainability in occupier strategies.
Ram Chandnani, Managing Director - Leasing, CBRE India, said, "Global capability centres and Indian occupiers are shaping the next chapter of the country's office sector. GCCs alone account for about 35-40 per cent of absorption, driven by their rapid evolution into high-value innovation hubs across AI, engineering, and life sciences."
Moreover, the survey added that there is a growing preference amongst occupiers to expand in smaller cities over the next few years. Companies are increasingly exploring tier-II and III cities as the next growth opportunity, aided by the presence of a skilled talent pool, competitive costs, and developing infrastructure and connectivity. (ANI)