India's Office Real Estate Market Surges: Rentals Rise and Vacancy Drops

India’s commercial office real estate sector continues to display remarkable resilience and growth momentum despite global headwinds.

According to the latest ANAROCK Research report, average office rentals across the top seven cities rose 6% year-on-year—from approximately ₹85 per sq. ft. in 9M 2024 to around ₹90 per sq. ft. in 9M 2025. Bengaluru led the surge with a 9% annual increase, reaffirming its status as India’s tech and innovation hub.

Even with increased office completions during the period, vacancy levels declined from 16.70% in 9M 2024 to 16.20% in 9M 2025, underscoring strong leasing activity. Chennai recorded the lowest office vacancy at 8.9%, while Hyderabad and NCR continued to see relatively higher vacancy levels.

Net office absorption across the top 7 cities soared 34% year-on-year to reach a record 42 million sq. ft., surpassing even pre-pandemic benchmarks by 30% compared to the same period in 2019. Pune emerged as the standout performer, recording a staggering 97% jump in net absorption—from 3.14 million sq. ft. in 9M 2024 to approximately 6.2 million sq. ft. this year.

Bengaluru led in absolute terms with nearly 9.95 million sq. ft. of office space leased, followed by Delhi-NCR (8.2 million sq. ft.) and MMR (6.6 million sq. ft.). Kolkata was the only city to record a decline, with leasing down 19% year-on-year.

Multiple factors are driving office space demand in the country despite all headwinds. GCCs (Global Capability Centres) are a major growth driver, accounting for over 40% of total gross leasing, or about 23.34 million sq. ft., in 9M 2025. Bengaluru, Pune, and Chennai saw the strongest leasing momentum from GCCs, according to Anuj Puri, Chairman of ANAROCK Group.

Supply trends remained healthy with new office completions rising 15% during the same period—from 34.07 million sq. ft. in 9M 2024 to 39.21 million sq. ft. in 9M 2025. Pune once again topped the charts, witnessing an impressive 168% jump in new completions. Bengaluru led in total new supply at 10.41 million sq. ft., while NCR doubled its new office stock with an 80% increase. However, Hyderabad and MMR were exceptions, witnessing declines of 39% and 41%, respectively, in new completions.

Sector-wise, IT/ITeS continued to dominate leasing activity, accounting for 27% of total absorption, followed by coworking spaces (23%) and BFSI (18%). The share of coworking operators grew from 21% last year to 23%, reflecting the growing preference for flexible, hybrid workspaces among corporates and start-ups alike.

Several companies are now looking for high-quality Grade A office spaces with better infrastructure and amenities, and green-certified sustainability features, adds Puri. This has also increased the demand for new office spaces equipped with these amenities and features.

With sustained demand from GCCs, flexible workspace operators, and domestic enterprises, India’s office market shows no signs of slowing down. The steady rise in rentals, declining vacancy, and robust absorption point to a healthy, supply-driven growth cycle that is likely to persist into 2026.