India's Office Market Hits All-Time High Net Absorption in 2025

New Delhi, Jan 5 (IANS) India’s office real estate sector closed CY25 with its strongest performance on record, registering net absorption of 61.4 million square feet (MSF) across the top eight cities, marking a robust 25 per cent year-on-year (YoY) increase, a report said on Monday.

The report from commercial real estate services firm Cushman & Wakefield said the surge was driven by strong occupier confidence and the market’s ability to deliver scale amid evolving business needs.

Bengaluru with 14.4 million square feet (MSF) of absorption and Delhi NCR with 10.9 MSF led the activity, followed by Mumbai (9.6 MSF), Hyderabad (9.1 MSF), Pune (8.2 MSF), Chennai (7.0 MSF), Kolkata (1.4 MSF) and Ahmedabad (0.8 MSF).

Chennai and Delhi NCR recorded the sharpest YoY growth at 187 per cent and 82 per cent respectively, underscoring strengthening market fundamentals and an increasing capacity to attract and absorb expanding office demand.

Gross leasing volume (GLV) stood near a record of around 89 MSF, with fresh leasing accounting for nearly 80 per cent of activity and Global Capability Centres hitting a new high of 29.3 MSF, or 33 per cent of GLV, the report said.

“With GCC expansion accounting for nearly one-third of total leasing, alongside rising technology adoption, a diversified occupier base and a vast talent pool, India is well positioned to maintain its leadership in the global office market through 2026 and beyond,” said Anshul Jain, Chief Executive – India, SEA, MEA & APAC Office and Retail, Cushman & Wakefield.

IT-BPM remained the largest sector at 31 per cent of leasing, posting its highest-ever annual leasing volume. Flexible workspace operators accounted for 15.3 per cent share with a 9 per cent YoY growth. BFSI and Engineering & Manufacturing sectors remained key contributors with 15.1 per cent and 14.3 per cent share, respectively.

Despite record supply, strong demand led to significant vacancy compression, with overall vacancy declining by 210 basis points (bps) YoY, the steepest annual drop on record. All major cities reported a reduction in vacancy levels, except Pune and Ahmedabad.

Pre-commitments also gained traction, particularly in prime markets with tightening vacancies, as occupiers sought to secure quality space ahead of project completion.

Rental growth was observed across all the top eight cities, led by Hyderabad and Mumbai (12–14 per cent YoY). Ahmedabad, Delhi NCR, and Chennai posted rental growth in the 6–9 per cent range, the report noted.