India's Commercial Real Estate Market Soars: MMR Leads with 28% Rental Growth
Despite global economic challenges, India's commercial real estate market has seen significant growth, with the Mumbai Metropolitan Region (MMR) leading the way with a 28% increase in rental values from 2022 to 2025.
Commercial Real EstateRental GrowthMmrOffice LeasingGlobal Capability CentresReal Estate MumbaiMay 23, 2025
Notably, the US, which is seeing considerable business policy uncertainty, accounts for 45 percent of total office space leasing in India – ahead of all other countries. Peush Jain, MD - Commercial Leasing & Advisory, ANAROCK Group, highlighted that in Mumbai, US-based banks contribute as much as 48% of BFSI leasing. “American companies’ appetite for prime Indian Grade A office spaces remains undiminished,” he said.
From 2022 to 2025, a powerful post-pandemic rebound has fueled consistent and growing demand for premium workspaces, especially in hotspots like the Mumbai Metropolitan Region (MMR), Delhi NCR, and Hyderabad. After a brief (COVID) pandemic-induced pause, India’s commercial real estate market has transitioned from quick recovery into a new growth phase.
As hybrid models give way to more traditional, structured in-office operations, companies are doubling down on their presence in prime business districts. The result has been a surge in demand for Grade A office spaces, driven by a mix of Global Capability Centres (GCCs), tech giants, and BFSI leaders. “GCCs have become the single-biggest transformation driver on India’s office leasing landscape,” said Jain. “Our data shows that in Q1 2025 alone, GCCs leased a staggering 8.35 million sq. ft., with Delhi NCR capturing close to 23% of that demand. Over the past two years, they have accounted for over 37% of all office leasing across the top 7 cities, signaling a long-term commitment to the country’s metropolitan business ecosystems.”
Meanwhile, the Mumbai Metropolitan Region (MMR) has emerged as the most expensive commercial market in India, with rental values soaring 28% from Rs 131 per sq. ft. in 2022 to Rs 168 in 2025. Prime micro-markets like Bandra-Kurla Complex (BKC), Lower Parel, and Andheri East continue to attract top-tier demand from finance, IT/ITeS, and startup sectors.
Delhi NCR registered a strong rise from Rs 92 to Rs 110/sq. ft. (20%) – driven primarily by infrastructure projects and rising demand in Noida and Gurugram. Hyderabad saw notable growth in office rental values – a 24.1% increase over four years – benefiting from its affordability, proactive government policies, and its thriving IT corridor.
Bangalore, the tech capital, saw a 15.8% increase, with Whitefield, ORR, and Electronic City continuing to attract global occupiers. Pune and Chennai showed only moderate rental growth of 11.1% and 9.1% respectively, mirroring the steady but controlled growth in their IT/ITES and industrial sectors.
Steady growth in commercial office rentals is improving rental yields, particularly in cities like Hyderabad and Delhi NCR, where capital values remain competitive. With REITs gaining traction and office absorption back to pre-pandemic levels, investor sentiment in the commercial space remains optimistic despite global headwinds.
“The overall sentiment in India’s commercial real estate (CRE) market remains resilient and optimistic,” says Peush Jain. “The future of work in India is not remote but reimagined. The hybrid work model has matured - not as a shift away from offices, but as a strategic blend of physical and flexible spaces. This evolution has ensured a strong leasing pipeline, particularly in tech parks, co-working hubs, and SEZs. As demand continues to outpace supply in prime micro-markets and India ramps up its stature as a global outsourcing powerhouse, rental values will continue to rise consistently.”
Frequently Asked Questions
What is the primary driver of office space leasing in India?
Global Capability Centres (GCCs) have become the primary driver of office space leasing in India, accounting for over 37% of all office leasing across the top 7 cities over the past two years.
Which city has seen the highest increase in rental values from 2022 to 2025?
The Mumbai Metropolitan Region (MMR) has seen the highest increase in rental values, with a 28% rise from Rs 131 per sq. ft. in 2022 to Rs 168 in 2025.
How has the hybrid work model affected the commercial real estate market in India?
The hybrid work model has matured into a strategic blend of physical and flexible spaces, ensuring a strong leasing pipeline, particularly in tech parks, co-working hubs, and SEZs.
What factors are contributing to the growth in office rental values in Hyderabad?
Hyderabad's growth in office rental values is attributed to its affordability, proactive government policies, and its thriving IT corridor.
What is the current sentiment in India's commercial real estate market?
The overall sentiment in India’s commercial real estate market remains resilient and optimistic, with steady growth in commercial office rentals improving rental yields and investor sentiment.
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