India’s commercial office market is poised to scale new heights, with net annual leasing projected to cross 50 million square feet (msf) in the next fiscal, according to CRISIL Ratings.
This marks a historic peak and reflects a sustained recovery since the pandemic, driven by diminishing work-from-home trends, strong demand from Global Capability Centres (GCCs), and increasing momentum across BFSI and flex space operators.
The shows a compound annual growth rate (CAGR) of 7–9% in net leasing through fiscal 2027. The supply side is also expanding steadily, expected to reach 53–57 msf annually, contributing to a 6.5–7% CAGR rise in total office stock, which is projected to hit 920–925 msf by the end of FY 2027, up from ~810 msf in March 2025.
Meanwhile, commercial office supply—moderating to ~47 msf last fiscal—is now climbing back to 53–55 msf this year, with projects nearing completion. Next fiscal is projected to maintain 55–57 msf, as developers adjust their pipeline to prevent vacancy overshoot. The result? Occupancy levels are set to improve, bolstering cash flows and credit profiles, as rental escalations and central bank interest rate cuts further ease pressure.
“With healthy demand absorbing the elevated supply, vacancy for Grade A office space is expected to decline to 15.5–16.0% by FY 2027, marking a 100 bps improvement,” says Gautam Shahi, Director, CRISIL Ratings.
Regional variation, however, remains. The NCR and MMR, which hold about a third of the inventory, may see 200–250 bps vacancy reduction due to solid demand from BFSI, flex, and IT/ITeS firms. In contrast, Pune may face a slight vacancy increase with supply outpacing absorption. The southern markets—with half the total office stock—are expected to maintain stable vacancy rates, backed by continued GCC activity.
“Declining vacancy, contracted rental escalations, and interest rate cuts are expected to lift cash flows and sustain healthy credit profiles for developers,” says Snehil Shukla, Associate Director, CRISIL Ratings. “Annual DSCR is projected to improve to 1.9–2.0x, from 1.7x last fiscal, reflecting strong financial health.”
India’s commercial office space is evolving into a resilient, future-ready sector—one that aligns with global enterprise shifts toward hybrid work, regional integration, and strategic talent deployment.
