India’s office sector closed 2025 on a historic high, registering net absorption of 61.4 million square feet (MSF) across the top eight cities, according to Cushman & Wakefield’s Q4 MarketBeat report. This represents a 25% year-on-year increase, reflecting robust occupier confidence, structural demand, and the market’s ability to deliver at scale despite evolving workplace strategies.
Net absorption—the net change in occupied office space—is a key measure of real estate demand. The record figure highlights the depth of India’s office market and its growing importance as a global business hub.
Bengaluru and Delhi NCR Lead the Charge
At the city level, Bengaluru dominated with 14.4 MSF of net absorption, contributing 23% of the total. Delhi NCR followed with 10.9 MSF, or 18% of the total, reflecting strong activity in core business districts. Mumbai accounted for 9.6 MSF, while Hyderabad (9.1 MSF), Pune (8.2 MSF), and Chennai (7.0 MSF) rounded out the top performers. Kolkata and Ahmedabad contributed 1.4 MSF and 0.8 MSF, respectively.
Chennai and Delhi NCR recorded the sharpest year-on-year growth—187% and 82%, respectively—underscoring the rising capacity of emerging cities to attract and absorb office demand. For corporates, these trends signal both opportunity and confidence in India’s office ecosystem.
Leasing Activity Remains Strong
Gross Leasing Volume (GLV), which measures total leasing activity including new take-ups, renewals, and pre-leases, stood at ~88.7 MSF, matching last year’s record. Fresh leasing drove nearly 80% of this activity, reflecting occupiers’ commitment to expand operations and secure premium office space.
Bengaluru (~22 MSF), Mumbai (~17 MSF), and Delhi NCR (~16 MSF) continued to dominate, collectively accounting for 62% of GLV. Hyderabad (12.4 MSF), Pune (9.9 MSF), Chennai (9.0 MSF), Kolkata (1.7 MSF), and Ahmedabad (0.9 MSF) completed the national picture, with Delhi NCR and Chennai posting strong YoY growth of 25% and 23%, respectively.
Global Capability Centres Driving Demand
Global Capability Centres (GCCs) emerged as a key driver, recording a new leasing high of 29.3 MSF—33% of total GLV. These centers reflect India’s growing importance in global enterprise strategies, particularly for technology, finance, and shared services operations.
From a sector perspective, IT-BPM retained dominance, accounting for 31% of total leasing and marking its highest-ever annual volume. Flexible workspace operators followed with a 15.3% share, a 9% YoY growth, while BFSI and engineering & manufacturing contributed 15.1% and 14.3%, respectively. This increasingly diversified demand underscores the market’s resilience and depth.
Supply Expands, Vacancy Declines
The office market also saw record supply additions, with ~53 MSF completed in 2025—a 17% YoY increase. Bengaluru and Pune alone accounted for 49% of completions, providing much-needed space and easing pressures in previously tight markets.
Despite the surge in supply, strong demand drove vacancy compression. Overall vacancy declined by 210 basis points (bps) YoY—the steepest drop on record. Most major cities reported falling vacancy levels, except Pune and Ahmedabad. Prime markets saw growing pre-commitments as occupiers sought to secure high-quality space before project completion.
Rental Growth Across Cities
Rents continued to rise across the top eight cities. Hyderabad and Mumbai led with 12–14% YoY growth, while Ahmedabad, Delhi NCR, and Chennai posted gains of 6–9%. Robust absorption and limited prime stock in key business districts contributed to steady rental growth, signaling healthy market fundamentals.
City-Wise Dynamics: Leaders and Emerging Hubs
Bengaluru maintained its position as India’s office capital, balancing large-scale demand with a diverse occupier base. IT-BPM firms, GCCs, and flex operators all contributed to consistent absorption, keeping vacancy low despite new completions.
Delhi NCR benefited from rapid absorption in key districts, reflecting both domestic and international corporate expansion. Chennai emerged as a rising opportunity hub, with its 187% YoY net absorption growth highlighting new corridors of demand.
Mumbai, while slightly softer in YoY leasing (-6.8%), retained its relevance as the financial hub of India. BFSI demand anchored the market, while flexible workspace operators adapted to evolving occupier needs, demonstrating the city’s resilience despite high rentals and limited land.
Hyderabad’s office sector grew steadily, driven by cost advantages, government-backed infrastructure, and a supportive regulatory environment. Pune also performed strongly, supported by IT-BPM and engineering demand. Smaller markets like Kolkata and Ahmedabad saw limited activity but continue to play a role in regional diversification strategies.
A Diversifying Market
The 2025 data show that India’s office market is not only growing but also diversifying. Companies are increasingly balancing cost, talent, and location, while GCCs and flexible workspace operators reshape workplace strategies. The rise of emerging corridors in Chennai, Pune, and Hyderabad signals that decentralisation is gaining momentum, even as Bengaluru, Delhi NCR, and Mumbai continue to anchor national activity.
Looking Ahead
Anshul Jain, Chief Executive at Cushman & Wakefield India, notes that the market’s strong performance reflects more than record numbers—it signals a long-term growth trajectory. “Occupier confidence, deep structural demand, and continued infrastructure development will keep India at the forefront of global enterprise decision-making,” he said.
Veera Babu, Executive Managing Director, added, “Fresh leasing accounting for nearly 80% of activity underscores the sustained appetite for quality office spaces, as IT-BPM, GCCs, and flex operators redefine workplace strategies and create a more agile, collaborative ecosystem.”
With India’s large talent pool, expanding GCC presence, and continued infrastructure investments, the office market is expected to maintain its momentum into 2026. Occupiers and investors can look forward to both established hubs and emerging micro-markets that provide opportunities to scale, collaborate, and innovate.
India’s office sector in 2025 has set new benchmarks for growth, absorption, and leasing activity. Bengaluru leads the way, Delhi NCR and Mumbai remain strong, and emerging cities like Chennai, Pune, and Hyderabad are carving their own identities. With continued corporate expansion, flexible work strategies, and infrastructure support, India’s office market is poised for another strong year, reinforcing its position as a key global destination for enterprise operations.
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