NEW DELHI: The commercial real estate sector in India showed a strong recovery in the first half of 2025, with net office leasing in the seven largest cities rising by 40% year-on-year to around 26.8 million sq ft, according to Anarock Research. This compares to 19.08 million sq ft in the same period last year.
Bengaluru was the standout performer, achieving 6.55 million sq ft of net absorption, a 64% increase from 4 million sq ft in H1 2024. Pune reported the highest year-on-year growth rate in leasing, soaring by 188% to 3.8 million sq ft, up from 1.32 million sq ft the previous year.
Conversely, Kolkata was the only city to experience a decline, with a 51% drop in net office leasing to 0.45 million sq ft.
New office completions in these key markets also grew substantially, increasing by 25% year-on-year to nearly 24.51 million sq ft, up from 19.65 million sq ft in H1 2024. Bengaluru again led the way with 6.91 million sq ft of new supply, followed by Hyderabad at 4.7 million sq ft. Notably, Pune experienced an impressive 533% surge in new supply, rising from 0.9 million sq ft to 5.7 million sq ft.
Despite the increase in supply, average office vacancy rates fell slightly to 16.3%, down from 16.7% a year ago. Nevertheless, Hyderabad continued to have the highest vacancy rate, which edged up to 26.6%.
“The office real estate market outperformed the residential sector in H1 2025,” stated Peush Jain, managing director (Commercial Leasing & Advisory). “Both net absorption and new completions experienced significant growth, highlighting India’s economic resilience and strong demand from occupiers.”
Average office rents climbed by 5% to ₹88 per sq ft per month, with Chennai leading rental growth at 6%, followed closely by Bengaluru and the NCR, both of which saw increases of 5%.
IT/ITeS companies remained the leading occupiers, accounting for 29% of total leasing, followed by co-working spaces (22%) and the BFSI sector (18%). There were also slight increases in demand from the consulting and e-commerce sectors.
According to Jain, the consistent leasing activity from global capability centers (GCCs) and U.S.-based firms, alongside India’s sustained economic growth, continues to reinforce the resilience of the office market.
