By CBRE India
India’s commercial real estate sector in 2025 is a dynamic landscape, offering immense potential for businesses and investors alike. With economic growth fueling demand, leasing commercial space in India has become a strategic priority for organizations aiming to establish or expand their presence in office, industrial, and retail markets. As a global leader in real estate services, CBRE India provides the insights and expertise needed to navigate this evolving market.
From occupiers seeking flexible workspaces to investors eyeing long-term opportunities, understanding the latest trends is crucial for making informed decisions. The Indian commercial real estate market in 2025 is buzzing with opportunities for businesses seeking office, industrial, and retail spaces, as well as investors looking to buy, sell, or manage properties. From economic shifts to sector-specific trends, this guide breaks down what’s shaping the market in simple, actionable insights. Whether you’re a potential occupier, current tenant, or investor, here’s what you need to know about commercial real estate in India for 2025 and beyond—straight from CBRE India’s expertise.
Economic Factors Driving India’s Commercial Real Estate in 2025
India’s economic landscape is setting a strong foundation for commercial real estate growth in 2025. Let’s dive into the key drivers.
What Does the RBI’s Growth Forecast and Rate Cuts Mean for Real Estate in 2025?
For those wondering about the impact of economic policies, the Reserve Bank of India (RBI) projects a robust 6.7% GDP growth for FY2026. In February 2025, the RBI’s Monetary Policy Committee slashed the repo rate by 25 basis points to 6.25%—the first cut in five years. This move signals optimism, making leasing commercial space in India more affordable through cheaper loans, which is a significant advantage for businesses. However, inflation remains a concern, with CPI forecasted at 4.8% for FY2025, potentially impacting operational costs.
How Does India’s Infrastructure Capex Boost Affect Commercial Real Estate in 2025?
If you’re curious about infrastructure’s role, the government is doubling down on development with a 10% year-on-year increase in capex allocations (INR 11.21 lakh crore for FY2026). This investment fuels growth in roads, railways, and ports, directly benefiting commercial space for sale in India, particularly in logistics and industrial hubs. Gross Fixed Capital Formation (GFCF) is expected to grow, with its share rising to 8.8% in 2024-25, driving long-term economic stability.
Insight: Think of this economic momentum like a well-oiled engine—steady rate cuts and infrastructure investments are the fuel powering India’s commercial real estate growth.
Office Space Market: What’s Hot in 2025
The office sector is primed for another year of gains, with evolving preferences shaping demand for leasing commercial space in India.
What Are the Supply and Absorption Trends for Office Spaces in India in 2025?
If you’re exploring office space trends, you’ll find steady growth in supply and absorption. In 2025, 60–65% of new office supply will be in high-quality investment-grade assets, especially in tech hubs like Bengaluru and Hyderabad. Absorption remains strong, with cities like Delhi-NCR and Mumbai leading at ~54% for green-certified assets. CBRE’s Q1 2025 research shows 60–65% of expected supply in 2025 will be in integrated tech parks.
What Priorities Are Occupiers and Developers Focusing on for Office Leasing in 2025?
For those interested in leasing priorities, occupiers and developers are aligning on key demands for leasing commercial space in India: proximity to public transport, pedestrian-friendly designs, wellness-focused spaces with outdoor areas and superior air quality, and flexible layouts with larger floor plates to support hybrid work models.
How Are Global Capability Centres Driving India’s Office Market in 2025?
If you’re curious about GCCs’ impact, they’re a major growth driver, contributing ~35–40% of office absorption in 2024, with a projected CAGR of 6% through 2030. Technology (27%), BFSI (20%), and EM (19%) sectors dominate GCC leasing activity. CBRE Q1 2025 data shows GCC leasing grew by 153% in APAC from 2022 to 2024.
For Renovators: Consider upgrading to green-certified designs to attract GCCs and tech firms looking for sustainable spaces.
Industrial Logistics (IL) Market: A Steady Climb
The IL sector is set for sustained growth, driven by e-commerce and infrastructure investments, creating opportunities for commercial space for sale in India.
What Is the Leasing Momentum Like in India’s IL Sector for 2025?
For those seeking insights into IL leasing, demand remains strong despite global challenges. In 2024, IL absorption reached 38.6 million sq. ft., up from 29.4 million sq. ft. in 2021. Supply kept pace, with 39.3 million sq. ft. added in 2024, primarily in cities like Delhi-NCR and Mumbai. Developers are targeting state-of-the-art facilities in cities like Bengaluru and Chennai.
Why Is In-City Warehousing Growing in India in 2025?
If you’re wondering about warehousing trends, in-city warehousing is gaining traction for faster deliveries. Quick-commerce platforms and micro-fulfillment centers (MFCs) are driving demand for compact urban warehouses, fueled by a rapid rise in tech-savvy consumers, internet penetration, and changing consumer preferences. CBRE Q1 2025 reports leasing activity in cities like Hyderabad and Pune grew from 0.35 million sq. ft. (2020–23) to 1.2 million sq. ft. in 2024.
For Investors: IL assets in tier-II cities like Pune offer high growth potential due to lower land costs and rising demand.
Retail Market: A Dynamic Shift in 2025
The retail sector is evolving rapidly, with new opportunities for occupiers and investors alike in India’s commercial real estate market.
How Are Supply and Leasing Growing in India’s Retail Sector in 2025?
For those exploring retail growth, supply and leasing are picking up pace. In 2024, 6.4 million sq. ft. of retail space was added, with cities like Mumbai and Delhi-NCR leading. Absorption reached 7.1 million sq. ft. in 2024, driven by malls and high streets. Malls are focusing on experiential elements, with entertainment and FB leasing up 13% in 2024.
What Is the Outlook for Rental Growth in India’s Retail Market in 2025?
If you’re interested in rental trends, growth in rents is expected to moderate in 2025, focusing on sustainable tenant-revenue ratios. High streets in cities like Bengaluru and Chennai saw 8–12% Y-o-Y rental growth in 2024.
For Current Occupiers: Negotiate flexible lease terms to manage costs in prime locations.
Why Are D2C Brands and Experiential Retail Gaining Traction in India in 2025?
For those curious about retail trends, Direct-to-consumer (D2C) brands and experiential retail are in the spotlight. D2C leasing accounted for 59% of retail activity in 2024, led by fashion and apparel (7%). Malls are integrating FB, entertainment, and retail to create “destinations.”
For Potential Occupiers: Look for spaces in mixed-use developments to tap into diverse customer bases.
Investments: Capital Inflows and Opportunities in 2025
Capital inflows into India’s commercial real estate sector are set to remain stable in 2025, offering opportunities for investors interested in commercial space for sale in India.
How Are Capital Inflows Performing in India’s Commercial Real Estate in 2025?
If you’re an investor seeking capital trends, investment activity is building on 2024’s momentum. Total capital inflows reached USD 11.4 billion in 2024, with office and IL sectors leading. These sectors are expected to see patient capital inflows in 2025, driven by a 4X Y-o-Y growth in foreign institutional investments. CBRE Q1 2025 data shows office investments grew from USD 5.9 billion in 2021 to USD 7.4 billion in 2023.
What Investment Strategies Are Investors Using in India’s CRE Market in 2025?
For those exploring investment strategies, investors are adopting mixed approaches to maintain momentum. This includes growth-controlled stakes for long-term commitment, Small and Medium Real Estate Investment Trusts (SM REITs) offering flexible listing options (INR 500 crore), and investments in alternative sectors like data centres and healthcare—such as Microsoft’s USD 119 million land acquisition in Pune for data centres.
For Investors: Consider SM REITs for diversified exposure, especially in office and IL assets, to balance risk and reward.
Data Centre Market: A Booming Sector in 2025
The data centre (DC) sector in India is poised for significant growth, driven by digital transformation.
Which Cities Are Leading Data Centre Growth in India in 2025?
If you’re interested in data centre growth, Mumbai, Chennai, and Delhi-NCR are leading the way, accounting for ~70% of India’s DC stock by 2025 with a projected capacity of 1,760 MW. Mumbai alone is expected to add ~440 MW, followed by Chennai and Delhi-NCR at ~400 MW each. Emerging markets like Hyderabad are also growing, with a 1.4X increase in stock by 2025.
How Is AI Impacting Data Centre Demand in India in 2025?
For those curious about AI’s role, demand for data centres is diversifying, with Technology, BFSI, and cloud services as major drivers. AI-led demand is increasing rack density to 30 KW/rack, prompting a shift to liquid-based cooling systems to support high-density infrastructure.
For Developers: Focus on flexible designs with immersion cooling to meet AI-driven demand.
Flexible Spaces: Adapting to New Work Trends in 2025
Flexible spaces are evolving to meet the needs of a dynamic workforce, offering new avenues for leasing commercial space in India.
How Are Flexible Spaces Supporting Hybrid Work in India in 2025?
If you’re exploring flexible workspaces, they’re adapting to hybrid work models. Organizations are prioritizing flexible workspaces to support hybrid setups, and operators are expanding into non-tier-I cities like Coimbatore, Indore, and Jaipur.
For Occupiers: Look for flexible spaces offering value-added services like optimized work environments.
What Types of Occupiers Are Adopting Flexible Spaces in India in 2025?
For those interested in occupier trends, the flex sector is seeing a broader base, with BFSI, EM, and tech sectors increasingly adopting flexible spaces. Operators are introducing adaptable lease terms to help businesses optimize space usage.
For Current Tenants: Negotiate adaptable lease terms to manage costs while scaling operations.
Summary: What This Means for You
India’s commercial real estate market in 2025 offers opportunities across sectors:
- Office: High-quality, green-certified spaces will dominate, with GCCs driving demand.
- IL: In-city warehousing and e-commerce will fuel growth, especially in tier-II cities.
- Data Centres: Mumbai, Chennai, and Delhi-NCR will lead, with AI-driven demand reshaping infrastructure.
- Flexible Spaces: Hybrid work and adaptable lease terms will drive growth in non-tier-I cities.
- Retail: Experiential malls and D2C brands will reshape the landscape, with steady rental growth.
- Economic Backdrop: Rate cuts and capex investments create a favorable environment for leasing commercial space in India.
Why Partner with CBRE India for Your CRE Journey?
Navigating the dynamic world of commercial space for sale in India can be complex. That’s where CBRE India comes in.
- Expert Guidance: From finding the right space to managing investments, we offer end-to-end solutions.
- Market Insights: Leverage our in-depth research to make informed decisions.
- Tailored Strategies: Whether you’re an occupier, investor, or renovator, we customize strategies to meet your goals.
Ready to take the next step? Connect with CBRE India to explore opportunities in 2025 and beyond. You can check our Indian portfolio for commercial real estate to understand the breadth and depth of our expertise.
FAQ: Quick Answers on Commercial Real Estate in India
What is the outlook for leasing commercial space in India in 2025?
Leasing is set to grow, with office absorption at ~54% for green-certified spaces, IL demand at 38.6 million sq. ft., and retail leasing up 7.1 million sq. ft. in 2024.
Why are GCCs important for India’s office market?
GCCs drive 35–40% of office absorption, focusing on tech, BFSI, and EM sectors, with a 6% CAGR projected through 2030.
How can investors benefit from the IL sector in 2025?
Invest in tier-II cities like Pune, where lower land costs and rising e-commerce demand offer high returns.
What trends are shaping India’s retail sector in 2025?
Experiential malls, D2C brands (59% of leasing in 2024), and steady rental growth are key drivers.
How does CBRE India support CRE decisions?
CBRE India provides expert guidance, market insights, and tailored strategies for occupiers and investors. You can find extensive real estate reports on our website, the latest being our 2025 India Market Outlook.
What’s Your Next Step in Commercial Real Estate?
Ready to explore leasing commercial space in India or invest in commercial space for sale in India? Contact CBRE India today to turn these 2025 trends into opportunities for your business or portfolio!
