Office Leasing Surges 40% in H1 2025: Bengaluru and Pune Lead the Way
India's net office leasing witnessed a 40% year-on-year increase in the first half of 2025, with Bengaluru and Pune leading the demand. The real estate market's robust performance reflects the country's economic strength and growing interest from global companies.
Office LeasingReal EstateBengaluruPuneEconomic GrowthReal Estate PuneJul 03, 2025
Among the top seven cities, Bengaluru recorded the highest net office absorption at 6.55 million square feet in H1 2025, up from 4 million square feet a year ago—a 64 per cent increase. Pune saw the sharpest growth, rising 188 per cent to 3.8 million square feet from 1.32 million square feet in the same period last year.
Kolkata was the only city to report a decline in leasing, with absorption falling 51 per cent to 0.45 million square feet in H1 2025 from 0.93 million square feet in H1 2024.
Bengaluru once again led the market in terms of new supply, with 6.91 million square feet added—up 26 per cent from 5.5 million square feet last year. Pune saw the highest percentage jump, recording a 533 per cent rise in new office supply—from just 0.9 million square feet in H1 2024 to over 5.7 million square feet in H1 2025.
In contrast, Mumbai Metropolitan Region (MMR) and Hyderabad recorded year-on-year declines in new supply. MMR added 1.9 million square feet, down 45 per cent from 3.47 million square feet in H1 2024. Hyderabad saw a 17 per cent dip, with new completions totalling 4.7 million square feet.
Peush Jain, managing director – commercial leasing and advisory, Anarock Group, said, “The office real estate market was ahead of its residential counterpart in H1 2025. Both net absorption and new office completions saw high growth, largely because of India's enduring economic strength. Also, overall office leasing by global capability centres (GCCs) across cities continues to grow in 2025, and large US-based corporates continue to lease large spaces across Indian cities.”
IT/ITeS firms dominated leasing with a 29 per cent share, followed by coworking at 22 per cent and BFSI at 18 per cent. Consultancy and e-commerce sectors also saw a 1 per cent increase in demand share compared to H1 2024, while manufacturing and industrial sectors declined.
The average office vacancy rate across the top seven cities fell to 16.3 per cent in H1 2025. However, MMR and Hyderabad recorded higher vacancy levels, with Hyderabad continuing to have the highest at 26.6 per cent.
Average monthly office rentals rose by 5 per cent from ₹84/sq. ft. in H1 2024 to ₹88/sq. ft. in H1 2025. Chennai led rental growth among cities, with a 6 per cent year-on-year increase.
Frequently Asked Questions
What is the overall growth in office leasing in H1 2025 compared to H1 2024?
India’s net office leasing rose 40 per cent year-on-year (Y-o-Y) in the first half of 2025, reaching 26.8 million square feet, up from 19.08 million square feet in H1 2024.
Which cities showed the highest growth in office absorption?
Bengaluru recorded the highest net office absorption at 6.55 million square feet, up from 4 million square feet a year ago—a 64 per cent increase. Pune saw the sharpest growth, rising 188 per cent to 3.8 million square feet from 1.32 million square feet.
What was the new office supply trend in H1 2025?
New office completions in the top seven cities increased 25 per cent year-on-year, from 19.65 million square feet in H1 2024 to 24.51 million square feet in H1 2025. Bengaluru led with 6.91 million square feet added, up 26 per cent from 5.5 million square feet last year.
Which sectors are driving the demand in the office leasing market?
IT/ITeS firms dominated leasing with a 29 per cent share, followed by coworking at 22 per cent and BFSI at 18 per cent. Consultancy and e-commerce sectors also saw a 1 per cent increase in demand share compared to H1 2024.
What is the trend in office vacancy and rental rates?
The average office vacancy rate across the top seven cities fell to 16.3 per cent in H1 2025. Average monthly office rentals rose by 5 per cent from ₹84/sq. ft. in H1 2024 to ₹88/sq. ft. in H1 2025. Chennai led rental growth among cities, with a 6 per cent year-on-year increase.
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