India’s office real estate market demonstrated notable resilience in 2025, with leasing activity across the country’s seven largest cities rising by 10 per cent year on year, despite global economic uncertainty and workforce restructuring in the technology sector. Industry estimates suggest that more than 55 million square feet of office space was absorbed during the year, underlining India’s growing appeal as a long-term corporate destination.
The performance, however, was uneven across cities. Bengaluru retained its position as the country’s largest office market, though leasing volumes dipped modestly compared to the previous year. Industry experts attribute this slowdown to cautious expansion by technology firms recalibrating global operations. Kolkata also recorded a marginal contraction, reflecting limited new demand and a relatively smaller corporate base. In contrast, Pune emerged as the fastest-growing office market in 2025, with leasing volumes rising sharply. Consultants link this surge to the city’s diversified occupier mix, improved connectivity, and competitive rentals, which have attracted both domestic firms and multinational back offices. Mumbai Metropolitan Region, Hyderabad, Chennai and the National Capital Region also posted steady gains, signalling a broader recovery beyond traditional technology-led demand. A defining trend during the year was the growing dominance of Global Capability Centres. These offshore units, set up by multinational corporations to handle engineering, finance, analytics and research functions, accounted for over two-fifths of total office leasing. According to a commercial leasing expert, global firms are increasingly committing to India for long-term operations due to its skilled workforce, cost efficiency and improving urban infrastructure. On the supply side, new office completions rose moderately, keeping pace with demand in most markets. Bengaluru led fresh additions, while Pune and Chennai saw sharp increases as developers responded to strong pre-commitments.
By contrast, Mumbai and Hyderabad experienced a slowdown in new supply, reflecting tighter development pipelines and regulatory complexities in dense urban environments. The balance between demand and supply led to a marginal improvement in occupancy levels across major cities. Overall vacancy rates edged down, though disparities remained. Hyderabad and NCR continued to report higher vacant stock, while Mumbai recorded one of the lowest vacancy levels, supported by limited new construction and sustained financial sector demand. Rental values also moved upward, with average office rents rising across all major markets. Analysts suggest that higher construction costs, sustainability upgrades and demand for well-located, energy-efficient buildings are pushing occupiers towards premium assets. Flexible workspaces continued to gain traction, reinforcing the shift towards hybrid work models and more inclusive office environments.
Urban planners argue that the next phase of growth must focus on low-carbon buildings, transit-linked offices and equitable access to workplaces. As India’s office leasing growth reshapes city skylines, aligning commercial development with sustainable urban planning will be critical to ensuring long-term economic and social resilience.
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