Indian Office Market 2025: Net Absorption and New Supply Surge

Team L&M

Despite challenges like IT layoffs and tariff tensions, the Indian office market in the top seven cities is booming. ANAROCK Research reports a record net absorption of 55.16 Mn sq. ft. in 2025, up 10% from 49.95 Mn sq. ft. in 2024.

City-Wise Net Office Absorption Trends

Bengaluru led with 14.15 Mn sq. ft. leased, slightly lower than 14.87 Mn sq. ft. in 2024, showing a 5% yearly dip. Pune recorded the highest growth, 63%, jumping from 4.8 Mn sq. ft. in 2024 to 7.8 Mn sq. ft. in 2025.

Kolkata saw a minor 3% decline, while MMR, Chennai, Hyderabad, and NCR recorded net absorption growth of 15%, 12%, 9%, and 7%, respectively.

New Office Supply Growth

Top seven cities added 51.83 Mn sq. ft. of office space in 2025, an 8% increase over 2024. Bengaluru contributed 13.5 Mn sq. ft., up 8% year-on-year.

Pune saw a 103% surge, from 5.23 Mn sq. ft. to 10.6 Mn sq. ft. Chennai and NCR rose by 72% and 46%, respectively. Kolkata posted the highest growth rate at 317%, although the total supply remains low at 0.13 Mn sq. ft.

MMR and Hyderabad faced supply drops of 35% and 39%, reflecting a tighter market.

Sector Demand Insights

Peush Jain, MD – Commercial Leasing & Advisory, ANAROCK Group, states:

“India’s office real estate market boomed in 2025. GCCs captured a 41% share of gross absorption, up from 36% in 2024. US corporates continue to expand across key Indian cities.”

The IT/ITeS sector dominated leasing with a 27% share. Coworking followed at 23%, and BFSI at 18%. Demand for coworking spaces rose by 2%, while IT/ITeS, manufacturing, and other sectors saw slight declines.

Vacancy Rates and Rentals

Office vacancies across top cities dropped marginally to 16.10% in 2025 from 16.50% in 2024. Hyderabad remains the highest at 26.3%, followed by NCR at 21.7%.

Average monthly rentals rose 6%, from INR 87/sq. ft. in 2024 to INR 92/sq. ft. in 2025. Bengaluru saw the highest hike at 9%, reaching INR 102/sq. ft., followed by Pune and NCR at 6%. MMR and Chennai rose 5%, Hyderabad 4%, and Kolkata 3%.