In Q3 2025, India’s top Hubs ten office micro-markets represented 70% of total demand, a decrease from previous quarters, indicating a trend towards geographical diversification. Absorption in these markets totalled 13.9 million sq ft, down 10% year-on-year and 8% sequentially, despite an overall increase in pan-India absorption, which reached 19.69 million sq ft 6% YoY and 5% QoQ growth. Major contributors were Bengaluru, Chennai, and Hyderabad, which accounted for 50% of absorption, with Bengaluru leading at 4.63 million sq ft. Notably, demand from the BFSI sector surged, while IT-Its’s share declined. New supply increased significantly.
Led by Pune and Bengaluru. Shrinivas Rao of Vestian noted strong market resilience driven by demand, enhanced construction activity, and a diversified occupier profile, positioning India’s office market for continued growth amidst global challenges In the evolving landscape of Indian commercial real estate, a compelling narrative has emerged: while the established business districts remain influential, an unmistakable shift is underway demand is spreading, diversification is accelerating, and the locus of office leasing activity is widening. This dynamic is captured well in the observation that “commercial hubs lead amid wider diversification.
Conventional “Commercial Hubs
The phrase crystallises two distinct forces at work. one of concentration, the other of spreading influence On one hand, the conventional “commercial hubs” those elite micro-markets comprising prime business districts in cities such as Bengaluru, Delhi-NCR, Mumbai, Hyderabad and Chennai continue to command significant absorption of office space. In Q3 of 2025, the top ten micro-markets alone accounted for some 13.9 million sq ft of leasing, reflecting their enduring pull for occupiers seeking Corporate Global Capability Centres (GCCs), technology firms, financial services and flex space operators These hubs benefit from decades of infrastructure investment, strong.
Brand associations, availability of large floor plates, access to talent, and connectivity both physical and digital Yet, and crucially, their share of total national absorption has been gradually falling from about 82% in Q3 2024 to 70% in Q3 2025 This is a meaningful indicator: it shows that leasing activity is no longer restricted to these core zones. Rather, occupiers are expanding their footprint into newer geographies, emerging business districts, suburban catchments and Tier-II cities. The phrase “wider diversification” aptly captures this broadening of the market What explains this duality strong core performance coupled with growing peripheral strength.
Amid Infrastructure And Connectivity
The answer lies in the changing priorities of occupiers and the structural shifts reshaping real estate demand. To begin with, cost pressures are mounting. As companies assess operating budgets, real estate remains a significant cost centre. Accordingly, less-expensive locations with (Cbre) improved infrastructure and connectivity become attractive alternatives. Intra-city connectivity has improved markedly access to mass transit, road upgrades and satellite towns means that emerging districts are not as far removed as once they were. The availability of high-quality Grade-A office stock in these newer locations is also improving, which addresses one of the traditional constraints.
In parallel, the nature of occupier demand is evolving. The tech sector, which once dominated demand profiles heavily, is now sharing space with other large-scale occupiers such as the BFSI (Banking, Financial Services & Insurance) segment. In Q3 2025, the BFSI share of absorption rose to 15% from 6% in the previous quarter the flexible workspace segment has assumed prominence too: flexible space now forms a larger component of the supply and demand chain, and companies are embracing hybrid working models, meaning location flexibility becomes a strategic advantage A further dimension is the maturation of residential catchments in areas proximate.
To newly emerging business districts. As satellite towns grow and amenities improve schools, retail, transport employees are more willing to live and work in these zones, supporting the growth of office uses there. The real-estate market is responding accordingly: developers are launching projects in locations beyond the traditional core business districts, and investors are eyeing yield and growth opportunities outside the intense competition of the prime micro-markets From a supply perspective, the wave of completions is also contributing to the diversification. In Q3 2025, India added 16.1 million sq ft of new supply across major cities a 10% quarter-on-quarter rise and 26% year-on-year growth.
NCR Together Accounted for 63%
Cities such as Pune, Bengaluru and NCR together accounted for 63% of that new supply This injection of new stock expands the choice set for occupiers, and when combined with lower costs and improved infrastructure, it accelerates the flow of leasing activity into non-core zones For investors and developers, this mixed picture of strong hubs combined with diversification presents both opportunities and challenges. On the opportunity side, emerging locations offer potentially higher yields, lower entry costs and the prospect of future appreciation as infrastructure and demand catch up. Developers who recognise the trend early and can deliver high-quality space in these zones may capture first-mover advantage.
On the challenge side, accurate forecasting becomes more complex: demand in newer districts is not as predictable, connectivity risks may persist, and the leasing profile may differ (smaller size deals, more fragmented occupiers). The market therefore requires a more nuanced strategy one that balances traditional prime-market assets (for stability and brand) with emerging-market bets Occupiers too must recalibrate their strategy. While many global and Indian companies will continue to anchor operations in the big hubs for branding, talent attraction and infrastructure, the wider diversification means that backend operations, large floorplate functions.
Shared-service centres and flexible work arrangements can be located outside the core to optimise cost and enhance operational agility. The rising importance of the technology sector and its dominance in leasing (around 40% in H1 2025 in top seven cities) underscores that high-quality space matters and that the market for Grade-A stock is strong even in emerging From a macro-economic perspective, the strength of India’s commercial real-estate market comes as no surprise. The country has emerged as a strategic hub for global corporations in the Asia-Pacific region: in 2024, India accounted for 47% of all India-Pacific office-leasing volumes up from 36% in 2015 strong fundamentals favourable.
Infrastructure The environment Supportive
Demographics, growing domestic demand, rising digital transformation, increasing foreign direct investment (FDI) and improving infrastructure the environment is supportive What does this mean going forward? For the next few years, we can anticipate a more balanced market: the core hubs will continue to play a vital role, but the “tail” of the market the emerging geographies will claim a growing share. Developers, investors and occupiers that recognise this bifurcation and adjust their strategy accordingly are more likely to succeed. They must focus on connectivity (transport, digital), quality of product tenancy profile (large versus small, flex versus traditional), and cost–benefit trade-offs
In summary, the phrase “commercial hubs lead amid wider diversification” encapsulates the duality of India’s office-space market: leadership by established business districts plus a broadening of the market footprint. The challenge and opportunity for stakeholders lies in (Targets) navigating that duality to retain strength in the hubs while embracing the opportunities generated by diversification. As the market continues to evolve, those who can blend location insight with operational agility will be best placed to capitalise on the growth in commercial real estate.
Q1. What do we mean by “commercial hubs” in the context of Indian real-estate?
Commercial hubs refer to key micro-markets or business districts like major office clusters in cities such as Bengaluru, Delhi‑NCR and Mumbai where high-quality Grade-A office space is concentrated and where absorption (leasing) is significantly higher than in peripheral or emerging locations. For example, the top ten micro-markets accounted for around 70 % of India’s national office-absorption in Q3 2025.
Q2. What is meant by “wider diversification” in office leasing and demand?
Wider diversification means that demand for office space is increasingly spreading beyond the traditional big hubs and micro-markets into newer cities, emerging business districts, peripheral zones, and non-core geographies. While the major commercial hubs continue to dominate, their share is falling (from 82% in Q3 2024 to 70% in Q3 2025) showing growth in other markets.
Q3. What are the drivers behind this shift in demand and location diversification?
Several factors are driving this trend: better intra-city connectivity, increased availability of high-quality (Grade-A) and sustainable office spaces in emerging markets, competitive rentals as occupiers seek lower operating costs, and mature residential clusters forming near emerging business districts which make such locations attractive for employees
Q4. Does this mean the big hubs are no longer important?
Not at all. The big hubs remain critically important they still account for a large chunk of absorption and remain the preferred locations for many large occupiers. For example, Bengaluru led with 4.63 million sq ft of leasing in Q3 2025, followed by Delhi-NCR (4.01 million sq ft) and Mumbai What is changing is their share is gradually reducing as supply, demand and occupiers spread out.
Q5. What implications does this trend have for investors, developers and occupiers?
For developers and investors, this trend means that looking beyond the traditional core markets can yield opportunities: emerging locations may offer better yields, less competition, and growth potential. For occupiers, this means greater choice, potentially lower cost, and access to new talent pools. But it also means that strategic planning must adapt: understanding new micro-markets, connectivity, future supply-demand dynamics, and emerging sectors becomes more important.
