Domestic companies are transforming India's commercial real estate landscape, representing a fundamental shift in market dynamics. This evolution reflects India's strengthening economy and changing corporate strategies focused on efficiency and consolidation. The shift in India's office leasing landscape is quantifiable - domestic occupiers now account for 46% of gross leasing activity versus 35% pre-pandemic.
Leasing volumes by domestic firms reached unprecedented levels in 2024 with 31.9 million sq. ft, with them continuing the strong momentum into Q1 2025 with 8.8 million sq. ft already leased.
Tthe BFSI sector has recorded the most substantial growth in average transaction size. BFSI firms have more than doubled their space requirements, with average deal sizes jumping from 10,500-11,500 sq. ft in 2017-2019 to 24,000-25,000 sq. ft in the 2022-Q1 2025 period, representing a staggering 125-130% increase.
Manufacturing follows closely behind with average deals growing from 7,000-8,000 sq. ft to 15,000-16,000 sq. ft, a 100-120% increase that reflects India's strengthened focus on domestic production capabilities.
While flex operators continue to secure the largest spaces per transaction at 57,000-60,000 sq. ft (up 35-45% from previous levels), technology firms have also substantially increased their footprint. The IT & ITeS sector now averages 31,000-32,000 sq. ft per deal, up 85-95% from the 2017-2019 period.
The growth in average deal sizes can be attributed to strategic consolidation efforts by BFSI companies centralizing operations, enhanced government policy support for manufacturing, and growing space needs from enterprise clients driving flex space demand, according to JLL,
Geographically, Delhi NCR leads in domestic leasing activity, while Mumbai has shown the most significant growth with its share increasing by approximately 62% since 2022 compared to the 2017-2019 period. Delhi NCR maintains its leadership position for domestic occupiers despite recent marginal declines, benefiting from a diversified industry ecosystem where flex operators command over 30% of leasing activity.
Mumbai's surge is largely attributed to financial sector expansion, with BFSI firms consistently representing more than 30% of domestic demand, establishing a clear industry specialization pattern in India's commercial hubs.
Flexible workspace providers continue showing heightened activity, while financial inclusion is fueling expansion among domestic BFSI and fintech firms. As global companies maintain their focus on India, local technology, consulting and manufacturing enterprises are capitalizing on partnership opportunities. Domestic pharmaceutical, biotech, EPC, aviation and OEM sectors are further accelerating this trend, leveraging India's talent base, cost advantages, and supportive policy environment.
