Bengaluru office demand hits a record 3.2m sq ft in Q1

This is the highest absorption level for an opening quarter.

Bengaluru’s office sector achieved a milestone in Q1 2025, recording its highest-ever net absorption at 3.2m sq ft, for an opening quarter since the pandemic. According to a JLL report, the record-breaking volume highlights the city’s position as a leading destination for corporate expansion and headcount growth.

“Bengaluru’s office market registered a total leasing activity of 4.3 million sq ft, a 37% y-o-y growth. Manufacturing/engineering took the pole position with 32.5%, indicating its growing importance in the city’s office landscape,” the report added.

Here’s more from JLL:

Bengaluru’s office market experienced healthy space addition, responding to persistent demand from occupiers, particularly those from technology, manufacturing and flex. Steady supply also indicates developer optimism about the city’s continued economic growth.

By the close of Q1 2025, Bengaluru’s office vacancy had fallen to 11.4%, marking a reduction of 50 bps q-o-q. This steady decrease reflects a sustained absorption of available spaces and a healthy balance between supply and demand in the city’s office market.

Bengaluru’s office sector continues to see rent uptick

The steady upward trajectory in Bengaluru’s office sector rents reflects the robust demand for office space, despite healthy supply inflow. The willingness to pay higher rents suggests occupier preference for high-quality, well-located office spaces.

Steady growth of capital values in Bengaluru’s office market strengthens the city’s appeal as a key destination for investors, with core asset availability and growth potential serving as key drivers of investment activity.

Outlook: Bengaluru’s position as a leading tech hub likely to underpin its office sector growth

While tech will likely remain dominant, there is a growing trend of diversification, with manufacturing, fintech and co-working sectors expanding their presence. Growth in GCCs and R&D facilities of multinational corporations should further boost office sector dynamics.

Bengaluru’s office market is absorbing new inventory while maintaining upward pressure on rents, indicating a positive outlook for commercial investments. Amid strong demand and decreasing vacancy rates, a steady increase in rents is anticipated.