Office Demand in key Business Hubs Outpaces Supply; Rents May Go Up: Mindspace REIT CEO

India's key office markets Bengaluru, Hyderabad, Pune, and Gurugram are witnessing higher demand for premium workspaces than new supply and this will lead to a drop in vacancy rates as well as an increase in rentals during 2025, Mindspace Business Parks REIT CEO Ramesh Nair said.

"As we step into 2025, India's office market stands at the cusp of transformative change, mirroring the dynamism of the nation's economy and its burgeoning workforce. This year will be shaped by a synergy of technology, sustainability, and evolving business priorities, redefining the way organisations utilise and perceive office spaces," he said.

Nair has listed ten key trends for India's office market in 2025 calendar year.

He said there is a scarcity of Grade-A office spaces in business hubs.

"Vacancy rates are projected to drop in key markets like Bengaluru, Hyderabad, Pune, and Gurugram as demand outpaces supply. This will create competitive leasing conditions and push rents upward in prime locations. Developers will need to accelerate project timelines to meet the surging demand," Nair said.

The Mindspace REIT CEO also expects interest rates to ease, paving the way for higher growth.

"More affordable financing will draw more investors toward promising office projects, while developers will seize this opportunity to create spaces that reflect India's economic vitality," he said.

Nair noted that India's economic resilience and digital transformation continue to inspire confidence in the office real estate sector.

"Modern offices that integrate technology and sustainability are becoming particularly attractive to both domestic and global investors, reinforcing their central role in India's growth story," he said.

Nair said the future of Indian offices is set to combine sustainability with advanced technology.

Features like green terraces, solar panels, and AI-driven systems will optimise energy use while enhancing operational efficiency, he added.

"Offices are evolving into vibrant community hubs with a focus on employee well-being. Open areas, fitness facilities, and wellness zones are becoming integral to creating ecosystems where India's workforce can thrive both professionally and personally," Nair said.

He also believes that flexible leasing arrangements are anticipated to gain traction, especially in high-cost markets like Mumbai and Delhi-NCR, providing businesses the agility needed to adapt and grow within dynamic market conditions.

"The office experience will be transformed by thoughtful technology integration. Features such as EV charging stations and smart building systems will become essential, improving how people interact with their workspaces every day," the CEO said.

In 2025, Nair said the importance of emergency readiness and safety protocols is expected to grow further.

The Mindspace CEO said workplaces are increasingly being designed to reflect organisational values.

"In a competitive talent market, thoughtfully designed workplaces with hotel-like services, top-class amenities, and inspiring aesthetics will play a key role in shaping how companies are perceived and how employees engage with their work," he said.

Nair also expects that older office properties will undergo significant transformations.

Upgrades focusing on energy efficiency and modern technology will ensure these buildings remain relevant and competitive in an era of sustainability-focused growth, he added.

"These predictions for 2025 underscore a pivotal year for India's office market - one of innovation, resilience, and adaptation," Nair concluded.

Mindspace Business Parks REIT, sponsored by K Raheja Corp group, was listed on the stock exchanges in August 2020.

It owns quality office portfolios in Mumbai Region, Pune, Hyderabad, and Chennai.

The portfolio has a total leasable area of 34.7 million square feet comprising 26.4 million square feet of completed area, 4.4 million square feet of area under construction and 3.9 million square feet of future development.

Mindspace portfolio consists of five integrated business parks and five independent office assets with superior infrastructure and amenities.