India's Office Real Estate Market Thrives with Rising Rentals and Strong Leasing
India's commercial office real estate market is experiencing a significant boom, with average rentals increasing by 6% and vacancy levels dropping to 16.20%. Key cities like Bengaluru, Pune, and Chennai are leading the surge in office space demand, driven by Global Capability Centres (GCCs), IT, coworking, and BFSI sectors.
Office Real EstateRentalsLeasingAnarock ResearchGlobal Capability CentresReal Estate PuneOct 30, 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,” said Anuj Puri, Chairman – ANAROCK Group. “Bengaluru, Pune, and Chennai saw the strongest leasing momentum from GCCs.”
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.
Frequently Asked Questions
What is the current trend in office rentals in India?
Average office rentals across the top seven cities in India have risen by 6% year-on-year, from approximately ₹85 per sq. ft. in 9M 2024 to around ₹90 per sq. ft. in 9M 2025.
Which city has the lowest office vacancy rate in India?
Chennai has the lowest office vacancy rate at 8.9%.
What sectors are driving office space demand in India?
IT/ITeS, coworking spaces, and BFSI are the main sectors driving office space demand, with IT/ITeS accounting for 27% of total absorption.
How has net office absorption changed in the top 7 cities?
Net office absorption across the top 7 cities has soared 34% year-on-year to reach a record 42 million sq. ft., surpassing pre-pandemic levels by 30%.
What is the role of Global Capability Centres (GCCs) in the office real estate market?
GCCs are a major growth driver, accounting for over 40% of total gross leasing, or about 23.34 million sq. ft., in 9M 2025.
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