Bengaluru Leads India's Commercial Real Estate Boom in 2025

India’s commercial office market is witnessing a strong upswing in 2025, with Bengaluru firmly at the forefront. According to ANAROCK Research, the top seven Indian cities recorded a 40% year-on-year growth in net office leasing during the first half (H1) of 2025, rising to approximately 26.8 million sq. ft., up from 19.08 million sq. ft. in H1 2024.

Bengaluru posted the highest net absorption of office space, clocking around 6.55 million sq. ft. in H1 2025—a 64% increase over the 4 million sq. ft. leased in the same period last year. Pune followed closely, with a staggering 188% growth, rising from 1.32 million sq. ft. to 3.8 million sq. ft. Kolkata was the only city to see a decline, with leasing activity dropping by 51% year-on-year.

New office completions across the top cities also rose 25%, from 19.65 million sq. ft. in H1 2024 to 24.51 million sq. ft. this year. Bengaluru again topped the list, adding 6.91 million sq. ft. of new stock—a 26% jump from last year’s 5.5 million sq. ft. Pune stood out with a 533% increase in supply (0.9 to 5.7 million sq. ft.), while NCR saw a 35% rise. Meanwhile, MMR and Hyderabad experienced declines of 45% and 17%, respectively.

The IT/ITeS sector remained the dominant driver of office space demand, accounting for 29% of leasing activity in H1 2025. Co-working spaces held strong with a 22% share, followed by BFSI at 18%. These segments saw a 1% increase in demand compared to last year, alongside gains from consulting and e-commerce companies. Manufacturing and industrial leasing, however, declined slightly. According to Peush Jain, MD – Commercial Leasing & Advisory, ANAROCK Group, India’s robust economic fundamentals continue to attract GCCs and large global corporates seeking stable markets.

Overall office vacancy rates improved marginally, dropping to 16.30% from 16.70% a year ago. However, some cities saw localised rises: MMR’s vacancy rate increased to 15.10%, and Hyderabad’s remained the highest at 26.60%. Average monthly office rents across the top cities rose 5%, from ₹84 to ₹88 per sq. ft. Chennai led with a 6% hike, while Bengaluru and NCR saw 5% increases.

With the highest absorption and fresh supply, Bengaluru continues to cement its status as India’s commercial capital. Industry experts say strong digital infrastructure, favourable demographics, and stable macroeconomics will keep corporate interest high in the coming quarters.