Chennai witnessed its highest leasing activity -the largest in the last five quarters- in Q1 2025 at 2.9 million sq ft, as per a new real estate consulting report.
Of this, about 60 per cent came from the Pallavaram-Thoraipakkam (PTR) zone and Old Mahabalipuram Road (OMR) Zone 2 micro markets. Flex space leasing, at 0.3 mn sq ft, surged by more than 3X times in comparison to the corresponding period of 2024.
Amidst robust demand and moderate supply, vacancy levels in Q1 2025 dropped by 300 basis points (bps) on an annual basis, says a recent Colliers India report.
Tata Consultancy Services’ 690,000 sq ft leased space at Ozone Tech Park in the OMR Zone; Walmart leasing 465,400 sq ft in CapitaLand ITPC-Radial Road in the Pallavaram-Thoraipakkam Road (PTR) and State Street leasing 202,000 sq ft in CapitaLand ITPC-Radial Road in PTR, the report said.
Top seven markets
Across India, office leasing across the top seven markets remained strong in Q1 2025 at 15.9 million sq ft, reflecting a 15 per cent year-on-year (YoY) increase.
Bengaluru and Delhi NCR together drove nearly half of the leasing activity during the quarter. While Delhi NCR saw its highest quarterly leasing in the last 10 quarters, Chennai too witnessed a 93 per cent y-o-y surge at 2.9 million sq ft, driven by space take-up by technology firms.
Overall new supply touched 9.9 million sq ft during Q1 2025, almost at par with the same period last year. Bengaluru and Delhi NCR together drove two-third of the new supply during Q1 2025. Almost 90 per cent of the new supply during Q1 2025 was concentrated in three cities – Bengaluru, Delhi NCR and Pune.
With demand outpacing new supply across most cities, average office rentals increased annually by 8 per cent during Q1 2025.
Technology sector continued to drive office space demand, leasing 4.4 million sq ft of conventional office space during Q1 2025, 28 per cent of the total demand during the quarter. BFSI and Engineering & Manufacturing demand was also healthy at 3.4 million sq ft and 2.4 million sq ft, together accounting for 36 per cent of the total space uptake in the quarter, the report said.
Published on April 14, 2025