India’s office property market ended 2025 on one of its strongest notes in recent history, with leasing activity in the final quarter reaching near-record levels across major cities. Strong demand from global corporations, expanding Global Capability Centres (GCCs) and the growing presence of flexible workspace operators helped reinforce the sector’s recovery and long-term relevance in a changing world of work.
Across the country’s eight largest office markets, gross leasing volumes in the fourth quarter rose sharply compared to earlier in the year, signalling confidence among occupiers despite global economic uncertainty. Market analysts say the performance reflects India’s continued competitiveness as a destination for technology, financial services and engineering-led operations, supported by a large talent pool and improving urban infrastructure. Southern cities once again anchored the momentum. Bengaluru retained its position as the country’s largest office market, driven by sustained demand from technology firms and multinational corporations consolidating or expanding their India operations. Hyderabad followed closely, benefitting from a steady pipeline of Grade A developments and proactive state-level infrastructure investment. Mumbai, despite higher occupancy costs, remained a critical hub for financial services and corporate headquarters, underlining its strategic importance. From a sectoral perspective, technology-led occupiers continued to account for the largest share of leasing, even as hiring patterns stabilised. What stood out in the quarter was the scale of activity by flexible workspace operators, who recorded their highest-ever quarterly absorption. Industry experts attribute this to enterprises adopting hybrid strategies that balance long-term leases with agile space requirements closer to residential catchments.
Financial services and manufacturing-linked occupiers also increased their footprint, reflecting broader economic diversification. This mix of demand has helped insulate the office market from sector-specific slowdowns and contributed to more stable vacancy levels across cities. On the supply side, new office completions accelerated, adding depth to India’s Grade A stock. Hyderabad led new deliveries, followed by Bengaluru and Pune, expanding choices for occupiers seeking energy-efficient buildings with modern amenities. Urban planners note that newer developments increasingly incorporate sustainability features such as improved daylighting, water efficiency and mass transit access elements that are becoming decisive factors for global tenants. Vacancy levels tightened during the quarter as absorption outpaced new supply in several micro-markets. Rentals showed a gradual upward movement, particularly in well-connected business districts with limited future supply. However, consultants caution that rental growth remains measured, reflecting occupier sensitivity to costs and a preference for long-term value over short-term escalation.
Looking ahead, the office sector’s performance highlights a structural shift rather than a cyclical spike. As cities adapt to hybrid work, climate resilience and transit-oriented development, office spaces are evolving into integrated employment hubs. The challenge for policymakers and developers will be to ensure that this growth supports inclusive urban economies, efficient mobility and lower environmental impact setting the foundation for a more balanced commercial real estate cycle in the years ahead.
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