India’s office property market delivered a contrasting picture in 2025, as leasing demand strengthened across major cities even while new supply contracted sharply in the country’s two largest commercial hubs. Delhi-NCR and Mumbai recorded notable declines in fresh office completions during the year, a shift that is reshaping vacancy levels, rental trajectories and long-term planning priorities for India’s most employment-intensive urban regions.
Industry data compiled from registration filings and market tracking indicates that new office supply in Delhi-NCR declined by roughly 15 per cent year-on-year, while Mumbai saw a steeper contraction of nearly 40 per cent. This occurred despite sustained occupier demand from technology firms, financial services companies and global capability centres, highlighting a growing mismatch between space absorption and project deliveries in high-density markets. Across the top cities, gross leasing activity rose by about six per cent to more than 70 million square feet in 2025. The expansion was driven by continued consolidation by large corporates, expansion of offshore operations, and a preference for modern, energy-efficient workspaces. As a result, vacancy levels tightened in several micro-markets, placing upward pressure on rentals, which rose by up to mid-teens percentages in select business districts. The divergence between demand and supply was particularly visible when compared with southern and western cities beyond Mumbai. Chennai and Pune more than doubled their annual office completions, supported by relatively faster approvals, availability of large land parcels and growing interest from multinational occupiers seeking cost-efficient yet well-connected locations.
Urban economists note that this redistribution of office growth could have long-term implications for employment geography and daily commuting patterns. In Delhi-NCR and Mumbai, the slowdown in supply reflects a combination of regulatory complexity, higher construction costs and cautious capital deployment amid evolving work patterns. Developers have increasingly prioritised phased construction and pre-commitments, limiting speculative additions. While this has reduced oversupply risks, it has also constrained options for smaller firms and start-ups seeking centrally located offices. Urban planners point out that limited office real estate supply in established hubs raises broader questions about sustainable city growth. Concentrated employment without proportional commercial development can intensify congestion, inflate rents and push firms towards longer commutes. At the same time, newer buildings coming to market are increasingly designed with lower energy intensity, improved ventilation and flexible layouts, aligning with emerging expectations around healthier, lower-carbon workplaces.
Looking ahead, analysts expect office real estate supply to recover gradually in Delhi-NCR and Mumbai over the next two to three years, as stalled projects restart and new transit-linked districts mature. The challenge for city authorities and developers will be to balance demand-led growth with infrastructure capacity, climate resilience and equitable access to jobs. How effectively India’s largest metros manage this transition will shape not just office markets, but the everyday experience of millions of urban workers.
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