India’s office real estate sector closed 2025 with its strongest performance on record, signalling a decisive shift from post-pandemic recovery to structural expansion. Across the country’s eight largest office markets, net absorption crossed 61 million sq ft, marking a sharp year-on-year increase and reinforcing India’s role as a critical destination for global and domestic enterprises seeking scale, talent, and operational resilience.
Industry data show that demand was not concentrated in a single city or sector. Instead, absorption was distributed across established metros and emerging hubs, reflecting how occupiers are rebalancing cost, connectivity, and workforce access. Net absorption a measure of actual occupied space rose faster than new supply in several markets, pointing to genuine business expansion rather than speculative leasing. Southern and northern markets led the cycle. India’s technology capital accounted for the largest share of absorption, driven by continued expansion from IT services firms, global capability centres, and flexible workspace operators. The national capital region followed closely, supported by renewed momentum in core business districts and improving transit infrastructure. Together, these regions anchored national demand while allowing other cities to scale rapidly. Western and southern cities also delivered strong outcomes. Mumbai maintained its position as the country’s financial nucleus, supported by banking, financial services, and professional firms, even as high rentals encouraged more efficient space utilisation. Hyderabad and Pune benefited from cost competitiveness and planned office corridors, while Chennai emerged as one of the fastest-growing markets, reflecting decentralisation within corporate location strategies.
Gross leasing volumes remained elevated, with fresh leases accounting for the majority of transactions. This indicates that occupiers are committing to long-term operations rather than merely renewing existing space. Analysts say this trend reflects confidence in India’s economic outlook and its expanding role in global enterprise supply chains, particularly for technology, engineering, and shared services. Global capability centres played a pivotal role in shaping demand, contributing roughly one-third of all leasing activity. Their expansion underscores India’s transition from a back-office destination to a hub for higher-value functions such as product development, analytics, and financial operations. Alongside this, flexible workspace providers continued to gain market share, offering occupiers adaptability amid evolving hybrid work models. Supply also expanded at a record pace, yet vacancy levels declined across most cities. This rare combination of high completions and falling vacancy highlights the depth of occupier demand and the importance of timely, well-located development. From an urban sustainability perspective, this reinforces the value of concentrating office growth in transit-connected districts, limiting sprawl and reducing commute-related emissions.
Looking ahead, the office market’s performance points to a more diversified and resilient urban economy. As infrastructure investments, metro networks, and climate-resilient building standards expand, India’s cities are likely to attract a wider range of occupiers. The challenge now lies in aligning this growth with inclusive planning ensuring that employment hubs remain accessible, resource-efficient, and integrated with surrounding communities as demand continues into 2026.
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