India's Commercial Office Rents Surge: Hyderabad and MMR Lead the Way
Hyderabad and Mumbai Metropolitan Region (MMR) top the charts with a significant increase in office rental rates, driven by growing demand and investor confidence in India's commercial real estate market.
Commercial Real EstateOffice RentsHyderabadMmrRental GrowthReal Estate MumbaiMay 23, 2025
Leading the nationwide surge in rental rates, the Mumbai Metropolitan Region (MMR) witnessed the highest jump, with rental values climbing 28 per cent over the same period. Rentals in MMR increased from Rs 131 in 2022 to Rs 168 in 2025. High-demand micro-markets such as Bandra-Kurla Complex, Lower Parel, and Andheri East remain preferred locations for sectors like finance, IT/ITeS, and startups.
Delhi NCR followed with a robust 20 per cent increase, as rents rose from Rs 92 to Rs 110 per square foot, driven by growing demand in Gurugram and Noida supported by new infrastructure projects. Bangalore recorded a 15.8 per cent rise in rental rates, anchored by sustained interest in Whitefield, Outer Ring Road, and Electronic City from global occupiers. Pune and Chennai experienced more moderate rental growth of 11.1 per cent and 9.1 per cent, respectively, reflecting steady expansion in their IT/ITES and industrial segments.
Despite ongoing global economic challenges, India’s commercial real estate market has demonstrated resilience, bouncing back from the pandemic-induced slowdown. Increasing demand for premium office space is evident as companies transition from hybrid work models back to structured in-office environments. This shift is particularly evident among Global Capability Centres (GCCs), technology giants, and BFSI sector players.
Peush Jain, Managing Director of Commercial Leasing and Advisory at ANAROCK Group, noted that in the first quarter of 2025, GCCs leased an impressive 8.35 million square feet of office space, with Delhi NCR alone accounting for nearly 23 per cent of this demand. Over the last two years, GCCs have contributed more than 37 per cent of office leasing across India’s top seven cities, highlighting a sustained commitment to expanding operations in metropolitan hubs.
Investor confidence is strengthening as rental yields improve, especially in Hyderabad and Delhi NCR, where capital values remain competitive. The return of office space absorption to pre-pandemic levels, alongside growing traction in Real Estate Investment Trusts (REITs), signals optimism in the commercial property sector despite global uncertainties.
According to Jain, India’s commercial real estate landscape is evolving with the hybrid work model maturing into a strategic combination of physical office spaces and flexible arrangements. This has maintained a strong leasing pipeline, particularly in technology parks, co-working hubs, and special economic zones.
As demand continues to surpass supply in prime micro-markets, India’s growing role as a global outsourcing hub will likely keep driving rental values upward. The commercial property market remains a key area of focus for businesses seeking strategic locations and investors aiming for long-term growth.
Frequently Asked Questions
Which city saw the highest increase in office rental rates from 2022 to 2025?
The Mumbai Metropolitan Region (MMR) witnessed the highest increase in office rental rates, with a 28 per cent rise from Rs 131 to Rs 168 per square foot per month.
What factors are driving the increase in office rental rates in India?
The increase in office rental rates is driven by growing demand from sectors like finance, IT/ITeS, and startups, as well as the transition from hybrid work models back to structured in-office environments and new infrastructure projects.
How much did office rents increase in Hyderabad from 2022 to 2025?
Office rents in Hyderabad increased by 24.1 per cent, from Rs 59 to Rs 72 per square foot per month.
What role do Global Capability Centres (GCCs) play in the commercial real estate market?
GCCs have played a significant role in the commercial real estate market, leasing a substantial amount of office space and contributing to the growth in demand, especially in cities like Delhi NCR.
How has the commercial real estate market in India responded to global economic challenges?
Despite global economic challenges, India's commercial real estate market has shown resilience, with rental yields improving and investor confidence strengthening, particularly in cities like Hyderabad and Delhi NCR.
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