2025: A DEFINING YEAR FOR OFFICE REAL ESTATE

Despite global uncertainties, India’s office market ended 2025 on a firm and resilient note. Year 2025 saw occupiers recalibrating their space requirements, balancing hybrid work models with consolidation driven demand in key metros. Developers responded with innovative offerings and flexible solutions and investors by becoming more discerning, with capital favoring well-located, quality assets. “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% share of gross absorption — up from 36% 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% overall leasing share,” adds Jain. Next came the coworking sector with a 23% share, and BFSI with 18%. Interestingly, 2025 saw demand from the coworking segment rise by 2% 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% in 2025 - a marginal improvement over the 16.50% in 2024. With reduced new office supply in MMR and Hyderabad in 2025, office vacancies dropped in both cities – from 15.50% in 2024 to 14.70% in 2025 in MMR, and from 26.50% to 26.30% in Hyderabad. Currently, Hyderabad has the highest vacancy rate among the top 7 cities, followed by NCR with 21.70%.

Office Rentals: Average monthly office rentals increased by a marginal 6% - from INR 87/sq. ft. in 2024 to INR 92/sq. ft. in 2025. Bengaluru recorded the highest 9% yearly rise – from INR 94/sq. ft. in 2024 to INR 102/sq. ft. in 2025. Both Pune and NCR recorded 6% yearly increases, while MMR as well as Chennai saw 5% y-o-y jumps. Hyderabad saw a yearly rise of just 4%, while Kolkata witnessed a 3% increase. Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE said, “India’s real estate market is now anchored by structural fundamentals rather than market cycles. A period of sustained investments, rapid digitization, and larger capital pools has created the conditions for a healthy balance between quality and quantity across asset classes. The office sector has proven to be critical to Indian real estate, as global and domestic enterprises expand their portfolios and consolidate into future-ready, green-certified campuses.”

Following are the key sectoral highlights of the year 2025

Demand Strength Persists: Underpinned by strong economic growth, India’s office market extended its post-pandemic upswing through 2025. Between January and September 2025, India’s office market recorded 60 million. sq. ft. of leasing — the highest ever for the first nine months of any year. Flight-to-Quality: During the year, occupiers continued to invest in collaborative and innovation-focussed workspaces, fuelling the demand for high-quality, tech enabled, and experience-driven environments. This resulted in continued leasing through expansion and relocation with ‘flight-to-quality as a key determinant. GCCs — The Largest Occupier: In 2025, GCCs accounted for 35%-40% of total office demand. These centres accounted for more than 55% of large office deals in 9M 2025 (over 100,000 sq. ft.), reaffirming global corporations’ long-term expansion plans. Green Priorities Firm Up: About 84% of new supply delivered between January and September 2025 was green-certified, while 77% of leasing occurred in such projects (over two-thirds within integrated tech parks) clearly signaling occupiers’ commitment to sustainable, future-ready campuses. Diverse Demand Composition: Office space leasing remained broad-based, led by technology firms and supported by flex operators, BFSI, engineering and manufacturing, and RCA occupiers, across domestic and global enterprises. REITs and IPOs Democratize Commercial Real Estate: India’s office market is entering a new era of democratization driven by increasing number of equity market listings in the form of REITs, SM REITs and Initial Public Offerings (IPOs). Out of the ~850 million sq ft of Grade A office stock in the country, around 135 million sq ft of assets are already listed under REITs.

The office space leasing momentum in 2025 was led by expansionary demand from GCCs and a gradual easing of inflationary pressures with improvements in credit accessibility that boosted office space demand across BFSI, Engineering & Manufacturing and flex space operators.