New Delhi, July 25 The Information Technology-enabled Services (ITeS) and IT sectors in India continue to dominate the commercial real estate (CRE) leasing segment, accounting for 50 per cent of absorption during April-June (Q2 2025), up from 36 percent in the previous quarter, a report said on Friday.
Flex spaces trailed behind, accounting for 14 per cent of the total absorption, an increase from 9 per cent in the previous quarter. The area absorbed by flex spaces increased by 68 per cent over the previous quarter. The southern cities of Bengaluru, Chennai and Hyderabad accounted for 80 per cent of absorption in metro cities, the report from CRE firm Vestian said.
Despite the surge in flex spaces, the IT-ITeS (Information Technology-enabled Services) sector remains the leading force in this segment, accounting for 9.4 million square feet in Q2 2025. Half of this leasing came from the localities of Bengaluru's Yeshwantpur, Hyderabad's Nanakramaguda, and Mumbai's Airoli.
The top seven cities recorded 36.75 million sq ft of absorption from the IT-ITeS in H1 2025, registering a 21 per cent increase over the same period year on year (YoY). BFSI follows closely behind with six per cent of absorption in this segment, down from 20 per cent in the previous quarter.
"With this growth rate, we anticipate absorption to surpass 75 million sq ft by the end of 2025, potentially reaching the highest-ever absorption in any calendar year," the report said.
“India’s office market continued to grow in Q2 2025, largely driven by robust absorption in major cities like Bengaluru, Hyderabad, and Mumbai. As more enterprises are transitioning back to in-office operations and several grade-A office projects are planned to be completed in the second half of 2025, the growth momentum is anticipated to continue with an increase in office utilisation ratio,” said Shrinivas Rao, CEO, Vestian.
Flex spaces are a type of commercial real estate that allows shorter leases (often from 7 months to a few years), and these combine office, industrial, and sometimes warehousing functions within the same property.
“So, businesses opting for flex spaces enjoy adaptable and customisable workspaces. Companies opt for flex spaces due to their short leases, which enable them to scale up or down quickly and reduce upfront capital costs,” said the report.
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