INDIAN OFFICE MARKET ON A ROLL

Team L&M

Despite notable headwinds, including IT layoffs and tariff tensions, the Indian office market in India’s top seven cities is on a roll. Latest ANAROCK Research data reveals that net office absorption in these cities is at all-time high of approx. 55.16 Mn sq. ft. in 2025 – a 10per cent yearly rise against approx. 49.95 Mn sq. ft. in 2024.

Surprisingly, while Bengaluru led other cities with approx. 14.15 Mn sq. ft. office space leased this year against approx. 14.87 Mn sq. ft. in 2024, the city witnessed a 5 per cent yearly decline in net leasing.

• In terms of annual net absorption growth, Pune recorded the highest with 63 per cent – from approx. 4.8 Mn sq. ft. in 2024 to approx. 7.8 Mn sq. ft. in 2025
• Besides Bengaluru, Kolkataalso witnessed a 3 per cent dropin net office absorption – from approx. 1.18 Mn sq. ft. in 2024 to approx. 1.15 Mn sq. ft. in 2025
• MMR, Chennai, Hyderabad, and NCRsaw net leasing jump 15 per cent, 12 per cent, 9 per cent and 7 per cent respectively

New Office Supply

In terms of new office completions, the top 7 cities recorded an 8 per cent yearly increase – from approx. 48.11 Mn sq. ft. in 2024 to approx. 51.83 Mn sq. ft. in 2025. Again, Bengaluru beat all other top cities with approx. 13.5 Mn sq. ft. of new office supply added in 2025, against 12.5 Mn sq. ft. in 2024 – an 8 per cent yearly growth.

• MMRand Hyderabadwere the only cities to see a drop in new supply addition in 2025 – by 35 per cent and 39 per cent, respectively. MMR added approx. 6.05 Mn sq. ft. office space in 2025 against approx. 9.27 Mn sq. ft. in 2024. Hyderabad saw approx. 9 Mn sq. ft. of new supply in 2025, against 12.88 Mn sq. ft. in 2024.
• Punerecorded a massive 103 per cent yearly jumpin new office supply – from 5.23 Mn sq. ft. in 2024 to over 10.60 Mn sq. ft. in 2025
• In Chennai, new office supply rose 72 per cent y-o-y – from 2.27 Mn sq. ft. in 2024 to 3.90 Mn sq. ft. in 2025, while NCR witnessed a 46 per cent rise – from 5.93 Mn sq. ft. in 2024 to 8.65 Mn sq. ft. in 2025.
• Kolkatasaw the highest 317 per cent yearly growthin new office completions, but this supply is also the lowest at just 0.13 Mn sq. ft. in 2025 against 0.03 Mn sq. ft. in 2024

“India’s office real estate market veritably boomed in 2025, with net absorption and new completions both surging thanks to the country’s robust economic growth,” says Peush Jain, MD – Commercial Leasing & Advisory, ANAROCK Group. “GCCs are leading the charge, capturing a record 41 per cent share of gross absorption — up from 36 per cent in 2024. Drawn by India’s economic strength, stability, and cost advantages, major US corporates are snapping up massive office spaces across our key cities.”

“Sector-wise, IT/ITeS continued to dominate office space demand in 2025 with a 27 per cent overall leasing share,” adds Jain. “Next came the coworking sector with a 23 per cent share, and BFSI with 18 per cent. Interestingly, 2025 saw demand from the coworking segment rise by 2 per cent against 2024. BFSI, consultancy businesses and e-commerce saw their shares grow 1% each; however, IT/ITeS, manufacturing & industrial and miscellaneous other sectors’ demand share dropped.”

Office Vacancies

Office space vacancies across the top 7 cities collectively dropped to 16.10 per cent in 2025 – a marginal improvement over the 16.50per cent in 2024. With reduced new office supply in MMR and Hyderabad in 2025, office vacancies dropped in both cities – from 15.50per cent in 2024 to 14.70 per cent in 2025 in MMR, and from 26.50 per cent to 26.30 per cent in Hyderabad. Currently, Hyderabad has the highest vacancy rate among the top 7 cities, followed by NCR with 21.70 per cent.

Office Rentals

Average monthly office rentals increased by a marginal 6 per cent – from INR 87/sq. ft. in 2024 to INR 92/sq. ft. in 2025. Bengaluru recorded the highest 9 per cent yearly rise – from INR 94/sq. ft. in 2024 to INR 102/sq. ft. in 2025. Both Pune and NCR recorded 6 per cent yearly increases, while MMR as well as Chennai saw 5 per cent y-o-y jumps. Hyderabad saw a yearly rise of just 4 per cent, while Kolkata witnessed a 3 per cent increase.