India's Commercial Real Estate Booming: Top Cities Driving Growth
From 2022 to 2025, India's commercial real estate market has seen significant growth, with Mumbai leading the pack with a 28% increase in rental values to INR 168 per sq. ft. Hyderabad follows closely with a 24.1% rise.
Commercial Real EstateRental ValuesMmrHyderabadDelhi NcrReal Estate NewsMay 24, 2025
The Mumbai Metropolitan Region (MMR) emerged as the frontrunner, experiencing a significant 28% rise in office rental values, climbing from INR 131 per sq. ft. in 2022 to INR 168 in 2025. This surge underscores MMR's position as India's most expensive commercial market, driven by robust demand from sectors such as finance, IT/ITeS, and startups, particularly in prime micro-markets like Bandra-Kurla Complex and Andheri East.
Hyderabad showcased the second-highest growth rate at 24.1%, with rental values increasing from Rs 59 to 72 per sq. ft. over the same period. The city's affordability, proactive government policies, and thriving IT corridor have contributed significantly to its appeal among occupiers seeking cost-effective yet strategic business locations.
Delhi NCR also registered substantial growth, marking a 20% increase in office rental values, driven by infrastructure projects and rising demand in Noida and Gurugram. Bangalore, known as India's tech capital, saw a 15.8% rise, with key areas like Whitefield and Electronic City attracting global occupiers. Meanwhile, Pune and Chennai reported moderate growth rates of 11.1% and 9.1%, respectively, reflecting steady expansions in their IT/ITES and industrial sectors.
Steady growth in rental yields has bolstered investor confidence, particularly in Hyderabad and Delhi NCR, where competitive capital values continue to attract investment. The rise in Real Estate Investment Trusts (REITs) and a return to pre-pandemic office absorption levels signal optimism despite global challenges.
Peush Jain, MD - Commercial Leasing & Advisory at ANAROCK Group, highlighted, 'The evolution of India's commercial real estate market reflects a reimagined future of work, blending physical and flexible spaces. This transformation has sustained a strong leasing pipeline across tech parks, co-working hubs, and Special Economic Zones (SEZs), ensuring continued growth in rental values amid supply constraints.'
As India solidifies its position as a global outsourcing hub, the trajectory of office rental values remains poised for consistent growth across key metropolitan markets.
Frequently Asked Questions
Which city in India has seen the highest increase in commercial rental values from 2022 to 2025?
Mumbai has seen the highest increase in commercial rental values, with a 28% rise from INR 131 per sq. ft. in 2022 to INR 168 in 2025.
What factors have contributed to the growth in Hyderabad's commercial real estate market?
Hyderabad's growth is attributed to its affordability, proactive government policies, and a thriving IT corridor, making it an attractive location for businesses.
Which sectors are driving the demand for commercial real estate in Mumbai?
The demand for commercial real estate in Mumbai is driven by sectors such as finance, IT/ITeS, and startups, particularly in prime micro-markets like Bandra-Kurla Complex and Andheri East.
What role have infrastructure projects played in the growth of commercial real estate in Delhi NCR?
Infrastructure projects in Delhi NCR, particularly in areas like Noida and Gurugram, have played a significant role in driving the growth of commercial real estate by increasing demand and improving connectivity.
How have Real Estate Investment Trusts (REITs) impacted the commercial real estate market in India?
The rise in Real Estate Investment Trusts (REITs) has attracted more investment into the commercial real estate market, particularly in cities like Hyderabad and Delhi NCR, where competitive capital values are a key factor.
Related News Articles
Unlocking $48 Billion in Indian Office Space: The Rise of Fractional Ownership
India's fractional ownership market is expected to exceed $5 billion by 2030
Budget 2024: Reviving Affordable Housing - A Sector in Crisis
The real estate sector is seeking 'high-impact' measures to revive affordable housing, including special schemes, tax breaks, and revised pricing definitions.
Can Urbanization and Nature Coexist? A New Vision for Cities
As cities expand, natural spaces are dwindling. But is it possible to create a symbiosis between urbanization and nature? We explore the possibilities.
Market Sentiment Remains Robust Amidst Fresh IPOs: Anand Tandon
Anand Tandon shares his insights on the current market sentiment, IPOs, and sectors to watch out for.
MahaRERA Orders Developers to Refund Buyers Amid Complaints Over Pending Home Sales
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has taken action against developers in Pune, a region heavily affected by pending home sales. MahaRERA has ordered developers to refund buyers to address the growing complaints.
Tayal Corp: Pioneering Architectural Excellence in Pune's Real Estate Market
Led by Ar. Sumit Tayal, Tayal Corp. is not just another real estate developer; it is a collective of thinkers, visionaries, and problem-solvers. Discover how this innovative company is transforming the landscape of Pune's real estate industry.