NEW DELHI: India’s office market achieved a remarkable milestone in 2025, with gross leasing volumes soaring to an unprecedented 86.4 million sq ft, reflecting a 20% year-on-year increase, as reported by Knight Frank India.
The annual leasing volume not only surpassed the previous high recorded in 2024 but also exceeded the pre-pandemic figure from 2019 by 43%.
Bengaluru retained its status as the nation’s largest office market, with 28.7 million sq ft leased, marking an impressive 59% year-on-year growth. Following Bengaluru were Hyderabad (11.4 million sq ft), Delhi NCR (11.3 million sq ft), Pune (10.8 million sq ft), and Chennai (10.1 million sq ft), each surpassing the 10 million sq ft leasing threshold. Mumbai, at 9.8 million sq ft, narrowly fell short.
The leasing activity remained strong in the latter half of the year, totaling 37.5 million sq ft in H2 2025, following 48.9 million sq ft in the first half.
GCCs Anchor Demand; Flex and IT Services Gain Ground
Global Capability Centres (GCCs) emerged as the leading occupier segment, contributing 38% of total leasing, approximately 31.8 million sq ft, underscoring India’s significance as a global center for research, development, and technology-driven operations. Nearly 47% of GCC leasing occurred in Bengaluru, with Hyderabad and Chennai following.
Flexible workspace operators accounted for 18.8 million sq ft leased, representing 22% of total leasing, while third-party IT services firms witnessed a strong recovery, leasing 15.3 million sq ft—an astonishing 94% increase from the previous year, driven by the growing adoption of AI and digital services.
From a qualitative perspective, Grade A office space remained the preferred choice for occupiers, constituting 91% of total leasing in 2025, reflecting a consistent demand for modern, efficient, and sustainable office environments.
Supply Lags Demand; Rents Increase
New office completions rose modestly by 9% year-on-year to 54.8 million sq ft in 2025, which fell short of the leasing volumes. Bengaluru led new supply with 16.2 million sq ft, trailed by Pune at 14.2 million sq ft. With demand significantly outpacing supply, vacancy rates tightened to 15.1%.
This imbalance strengthened landlords’ pricing power, resulting in rental increases across all major markets. NCR and Hyderabad experienced rental growth of about 10% year-on-year, while Mumbai and Bengaluru saw increases of around 6%. Knight Frank highlighted that rents in India have been on the rise since 2022, even as many global office markets faced challenges.
