India's Office Leasing Surges to Record 86.4 Million Sq Ft in 2025: Knight Frank

India’s office real estate market clocked its strongest-ever performance in 2025, with annual gross leasing touching a record 86.4 million square feet, according to Knight Frank India’s latest India Real Estate – Office and Residential Market (H2 2025) report.

Leasing activity rose 20% year-on-year, surpassing the previous peak recorded in 2024 and marking a 43% jump over pre-pandemic levels of 2019. The surge reflects sustained occupier confidence and India’s rising stature as a global business and investment destination.

Bengaluru retained its position as the country’s largest office market, clocking 28 million sq ft of leasing—its highest-ever annual total. It was followed by Hyderabad (11.4 million sq ft), National Capital Region (11.3 million sq ft), Pune (10.8 million sq ft) and Chennai (10.1 million sq ft), all of which crossed the 10 million sq ft mark. Mumbai, at 9.8 million sq ft, narrowly missed the milestone.

Global Capability Centres (GCCs) emerged as the key demand driver, accounting for 38% of total office absorption during the year. Bengaluru alone captured nearly half of all GCC-related leasing, reinforcing its status as India’s leading hub for technology, research, and global operations. Flexible workspace operators and third-party IT services firms also recorded their highest-ever annual leasing volumes, signaling renewed confidence among technology-led occupiers.

On the supply side, new office completions grew at a slower pace. Total completions rose 9% year-on-year to 54.8 million sq ft, with Bengaluru and Pune accounting for a large share of new additions. The supply-demand mismatch led to firm rental growth across major markets, with NCR and Hyderabad seeing annual rental appreciation of around 10%, followed by Mumbai and Bengaluru at about 6% each.

Knight Frank noted that Grade A office space continued to dominate occupier preference, accounting for over 90% of total leasing in 2025, as companies increasingly prioritised modern infrastructure, sustainability, and long-term operational efficiency.

With strong demand momentum expected to continue into 2026 and limited near-term supply additions, the Indian office market is set to remain one of the strongest performers globally, despite ongoing geopolitical and economic uncertainties.