India’s commercial real estate market closed 2025 with its strongest performance on record, signalling a decisive shift in how global businesses, investors, and cities view the country’s office landscape. Office space absorption crossed 61 million square feet during the year, reflecting sustained occupier confidence despite new supply entering key urban markets.
The scale of leasing activity underscores the growing role of Indian cities as global service and technology hubs. Bengaluru and the Delhi–National Capital Region emerged as the largest contributors, while Mumbai, Hyderabad, Pune and Chennai continued to attract steady demand from both domestic firms and multinational occupiers. Industry analysts attribute this momentum to a mix of global capability centre (GCC) expansion, hybrid work stabilisation, and India’s strengthening position in global value chains. A defining feature of 2025 was the dominance of GCCs, which accounted for nearly a third of overall leasing. These centres, operated by multinational corporations for technology, engineering, finance and research functions, are increasingly favouring large-format, energy-efficient campuses. Urban planners note that this trend is shaping not just office design, but also transport planning, housing demand and social infrastructure in peripheral business districts. Importantly, leasing growth was achieved even as new office stock continued to enter the market. Fresh completions during the year exceeded 50 million square feet, yet vacancy levels declined across most major cities. This tightening reflects a market where demand is outpacing supply in well-connected, transit-oriented locations. Buildings with strong sustainability credentials, modern ventilation systems and access to mass transit recorded faster absorption than older stock.
Rental values responded accordingly. Select micro-markets, particularly in Mumbai and Hyderabad, reported double-digit rental appreciation. For city economies, this translates into higher municipal revenues, improved asset values, and renewed interest in commercial redevelopment. However, urban economists caution that rising rents must be balanced with inclusive planning to prevent displacement of smaller enterprises. The improving fundamentals have also strengthened the outlook for listed real estate investment trusts. Higher occupancy, firmer rentals and predictable cash flows are enhancing yield visibility for long-term investors. Analysts see this as a reinforcing cycle, where institutional capital supports better-quality assets, which in turn attract global occupiers seeking stable, compliant workspaces. From a sustainability perspective, the office market’s evolution presents an opportunity. Concentrated employment hubs, when aligned with metro networks and mixed-use zoning, can reduce commute distances and carbon intensity. Several cities are beginning to integrate office growth with climate-resilient infrastructure, including district cooling, renewable energy integration and pedestrian-friendly planning.
As India enters 2026, the office sector’s performance reflects more than a cyclical rebound. It points to a structural realignment in how workspaces are planned, financed and integrated into cities. The challenge ahead lies in ensuring that this growth supports equitable employment, resilient urban systems and long-term economic productivity rather than fragmented, carbon-intensive sprawl.
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