INDIA OFFICE LEASING TRENDS 2025

The strong leasing numbers and net absorption of office spaces across Indian cities reflect the depth of demand from global and domestic occupiers, with Global Capability Centres (GCCs), IT-BPM firms, flex operators, BFSI, and engineering & manufacturing companies driving growth. Net Absorption – is a key indicator of real estate demand in terms of expansion of occupied space in the market, stood at 13.5 MSF in Q2, marking a 19% year-on year growth, and totaled 27.8 msf for H1 2025. Delhi NCR (5.2 MSF), Pune (4.3 MSF), and Chennai (3.1 MSF) posted their highest ever half yearly net absorption, reflecting long-term occupier confidence in the Indian office market.

Leasing Volume – In terms of cities, Bengaluru (5.0 MSF), Delhi NCR (4.6 msf) and Mumbai (3.9 msf) collectively contributed around 63% of the quarterly leasing volume. The other cities followed with Pune (3.3 msf), Chennai (2.2 msf), Hyderabad (1.7 msf), Kolkata (0.5 msf) and Ahmedabad (0.2 msf).

Global Market Comparison

As global office markets mature, Indian cities dominate the net absorption. The demand for commercial space in Top 8 Indian cities has grown at a 11% CAGR in the year 2020-25. London was the costliest in terms of rentals for office space at $207 per sq ft per yr ($ psf/year). New York rentals recorded at $82, Tokyo at $76, Beijing at $56, HongKong $70, Mumbai at $27 whereas Bengaluru as the most affordable at $27/per sq ft per year.

The office rentals as of Q3CY24 for Mumbai and Bengaluru was the most competitive among global cities. For comparison the operating cost in a Tier-II US city per FTE (Full Time Employee) per BPM Business process managedment is indexed at 100, the same is 19 for Bengaluru (As of FY23).