Bengaluru Leads India's Office Market Despite Traffic Woes; Pune Sees Rapid Growth, Kolkata Slips

Bengaluru continues to outshine other metros as India’s most resilient office market, even as traffic gridlocks and infrastructure strain persist. According to ANAROCK Research, the city recorded the highest office leasing in the country among the top seven cities — nearly 9.95 million sq. ft. in the first nine months of 2025, up 22% from a year ago.

At the same time, Pune emerged as the year’s biggest gainer, with net office absorption nearly doubling to 6.2 million sq. ft., reflecting robust demand from technology firms, BFSI occupiers, and coworking operators expanding in the city’s new business corridors.

By contrast, Kolkata was the only major city to post a decline in office leasing, with absorption falling 19% year-on-year, underscoring the uneven recovery across India’s top seven office markets.

What’s Working for Bengaluru

Despite persistent congestion and infrastructure bottlenecks, Bengaluru remains the top choice for occupiers, led by IT/ITeS, global capability centres (GCCs), and coworking players. IT/ITeS firms alone accounted for 27% of total office space absorption across India, with a large share concentrated in the city’s Outer Ring Road and Whitefield micro-markets.

Bengaluru also saw a 9% rise in rentals, the highest among major metros, while its vacancy rate dropped to 12.2% from 13%, signaling that space additions continue to be quickly absorbed.

Pune: The Fastest-Growing Market

Pune stood out as the fastest-growing office market among the seven cities, posting a 97% year-on-year jump in net absorption and a 168% rise in new completions. The city’s well-balanced occupier mix, from IT/ITeS and engineering firms to BFSI and startups, has made it one of the most dynamic real estate hubs post-pandemic.

Lower rentals compared to Mumbai and Bengaluru, improving connectivity, and a growing base of multinational occupiers have helped Pune transform from a satellite city into a core commercial destination.

Why Kolkata is Struggling

Kolkata’s commercial real estate remained subdued, with net office absorption slipping to 0.85 million sq. ft. in the nine months of 2025 from 1.05 million sq. ft. last year.

Limited Grade-A supply, slower infrastructure development, and a lack of large multinational occupiers continue to weigh on the city’s growth prospects. The vacancy rate remains high at 17.8%, only slightly down from 18.3% in 2024, suggesting sluggish demand.

City-Wise Office Absorption and Vacancy (9M 2025)

| City | Net Absorption (mn sq. ft.) | Change YoY | Vacancy (%) 2025 | Vacancy (%) 2024 | |---------------|-----------------------------|------------|------------------|------------------| | Bengaluru | 9.95 | +22% | 12.2 | 13.0 | | Delhi-NCR | 8.20 | +24% | 22.0 | 23.3 | | MMR (Mumbai) | 6.60 | +31% | 14.9 | 14.8 | | Hyderabad | 5.70 | +29% | 26.5 | 26.6 | | Pune | 6.20 | +97% | 11.9 | 11.5 | | Chennai | 4.50 | +56% | 8.9 | 9.4 | | Kolkata | 0.85 | -19% | 17.8 | 18.3 | | Total (Top 7) | 42.00 | +34% | 16.2 | 16.7 |

Source: ANAROCK Research & Advisory (9M 2025 vs 9M 2024)

Pan-India Snapshot

Across India’s top seven office markets, rentals rose 6% year-on-year to ₹90 per sq. ft., while overall vacancy eased slightly to 16.2%. Net office absorption reached a six-year high of 42 million sq. ft., driven by continued expansion in tech, flexible workspaces, and BFSI.

Hyderabad continued to report the highest vacancy rate at 26.5%, highlighting supply-side pressures in certain micro-markets despite healthy leasing activity. In contrast, Chennai recorded a single-digit office vacancy of 8.9%, the lowest among the top seven metros, reflecting a tight, well-balanced office market with strong demand-supply alignment.

Together, Bengaluru, NCR, and MMR accounted for nearly 60% of total leasing, while Pune and Chennai saw the sharpest growth rates.