Pune, Hyderabad, and Bengaluru Lead India's Office Real Estate Market in 2025
India's office real estate market saw robust growth in the first half of 2025, with demand reaching 34.5 million square feet. Key cities like Pune, Hyderabad, and Bengaluru are driving this momentum.
Real EstateOffice MarketIndiaPuneBengaluruReal Estate NewsAug 30, 2025
The report noted that vacancy levels declined by 210 basis points year-on-year, supported by a favorable demand-to-supply ratio of 1.3X across the last six quarters. Pan-India weighted average rentals rose to Rs90.7 per square foot per month in Q2 2025, marking a 4.7 per cent quarter-on-quarter growth, further reinforcing India’s status as a landlord’s market.
IT/ITeS remained the largest demand driver with a 24 per cent share, followed by BFSI (20 per cent) and co-working operators (19 per cent). Hyderabad emerged as the top destination for co-working, contributing 29 per cent to national demand in Q2. The city is also poised to surpass the Mumbai Metropolitan Region (MMR) in total office stock by the next quarter.
Bengaluru and Pune accounted for nearly 40 per cent of aggregate demand, while Pune alone contributed almost 30 per cent of new supply during H1 2025. This surge in demand and supply is a testament to the growing economic activities and business expansions in these cities, making them key players in the Indian real estate sector.
The robust performance of these cities is not only attracting domestic investors but also drawing significant attention from international real estate firms. The favorable business environment, skilled workforce, and infrastructure development are key factors driving this growth. As the market continues to evolve, these cities are expected to maintain their leading positions in the coming years, further solidifying India’s position as a global real estate hub.
Frequently Asked Questions
What is the current demand for office space in India as of the first half of 2025?
The demand for office space in India reached 34.5 million square feet in the first half of 2025, according to a report by CREDAI and CRE Matrix.
Which sectors are driving the demand for office space in India?
The IT/ITeS sector is the largest demand driver, accounting for 24 per cent of the demand, followed by BFSI (20 per cent) and co-working operators (19 per cent).
How has the vacancy rate in the office real estate market changed year-on-year?
The vacancy levels in the office real estate market declined by 210 basis points year-on-year, supported by a favorable demand-to-supply ratio of 1.3X across the last six quarters.
Which city is leading in co-working space demand?
Hyderabad emerged as the top destination for co-working, contributing 29 per cent to national demand in Q2 2025.
What is the contribution of Pune and Bengaluru to the overall demand for office space?
Bengaluru and Pune accounted for nearly 40 per cent of aggregate demand, while Pune alone contributed almost 30 per cent of new supply during H1 2025.
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