India's Office Market Surges to 86.4 Million Sq Ft in 2025; Bengaluru Takes the Lead

India’s office real estate market recorded a robust performance in 2025, with gross leasing reaching 86.4 million sq ft (msf), marking a 20% increase from 71.9 million sq ft in 2024. This milestone surpasses the previous peak and highlights the sustained expansion of occupier demand over the past four years, according to a report by Knight Frank India.

The office leasing activity also represents a 43% rise over the pre-pandemic high recorded in 2019. Bengaluru retained its position as the country’s largest office market, leasing 28.7 million sq ft, a 58.9% increase from 2024. Of this, 63% of the leased space was occupied by Global Capability Centres (GCCs), underscoring the city’s role as the nation’s technology and innovation hub.

Other major cities also witnessed notable growth in office leasing. Hyderabad saw a 10% increase to 11.4 million sq ft, while Pune experienced a 36% rise to 10.8 million sq ft. Chennai recorded a 24% increase to 10.1 million sq ft, and Kolkata saw a significant 69% growth to 2.3 million sq ft. However, the office leasing in Delhi-NCR fell by 11% to 11.3 million sq ft, and Mumbai witnessed a 5% decline to 9.8 million sq ft. Ahmedabad also saw a decrease of 34% to 2 million sq ft.

Rents across all markets increased in 2025, consistently higher since 2022, as Indian landlords have been able to negotiate better terms in a market where the strongest office markets have struggled globally. The report stated, “As supply remained muted compared to leasing volumes, rents firmed up further across all markets over the course of the year. This dynamic has strengthened landlords’ pricing power, driving rental growth.” Rents grew between 1% and 16% year-on-year (YoY) across all markets in H2 2025. Kolkata saw the highest growth at 16% YoY, followed by NCR and Hyderabad at 10% YoY each, and Mumbai and Bengaluru at 6% each.

New office completions rose 9% YoY to 54.8 million sq ft, with Bengaluru (16.2 million sq ft) and Pune (14.2 million sq ft) leading new supply additions. Despite this growth, leasing demand outpaced supply, keeping vacancy rates at 15.1% and driving rental appreciation across all major markets.

Grade A office space remained the preferred choice for occupiers, accounting for 91% of total leasing in 2025. Larger deal sizes and long-term commitments reflect evolving occupier strategies prioritizing operational efficiency, talent access, and scalable growth.

GCCs emerged as the largest occupier segment, accounting for 38% of total absorption at 31.8 million square feet. Flex space accounted for 18.8 million square feet, representing a 22% share of total gross leasing in 2025. Third-party IT services took up 15.3 million sq ft during the year, accounting for 20% of the transacted area, with volumes growing 94% YoY.

The strong momentum continued in the second half of the year. Leasing activity during H2 2025 stood at 37.5 million sq ft, second only to the exceptionally high absorption recorded in H1 2025 (January – June 2025) at 48.9 million sq ft.

Looking ahead, the report projects a strong outlook for 2026, with sustained visibility and stability underpinning future growth. “India’s office market delivered an exceptional performance in 2025, surpassing previous peaks and demonstrating the depth of occupier confidence. With five major markets recording record transactions, the expansion is geographically diversified, and Bengaluru continues to lead alongside Hyderabad, Pune, Chennai, and NCR,” said Shishir Baijal, Chairman and Managing Director of Knight Frank India.