Net office leasing in top Indian cities hits record 55 msf in 2025: Report

The Indian office market across its top seven cities is set to report an all-time high of about 55.16 million square feet (msf) of leasing in 2025, according to real estate consultancy Anarock.

 

Despite headwinds such as information technology (IT) layoffs and global tariff tensions, office leasing is expected to grow 10 per cent year-on-year (Y-o-Y) from 49.95 msf in 2024.

 

“Global capability centres (GCCs) are leading the charge, capturing a record 41 per cent share of gross absorption, up from 36 per cent in 2024. Drawn by India’s economic strength, stability and cost advantages, major US corporates are snapping up large office spaces across key cities,” said Peush Jain, managing director, commercial leasing and advisory, Anarock Group.

 

Which sectors drove office demand in 2025?

 

Sector-wise, IT and IT-enabled services (ITeS) continued to dominate office space demand in 2025 with a 27 per cent share of total leasing. The coworking segment followed with a 23 per cent share, while banking, financial services and insurance (BFSI) accounted for 18 per cent.

 

Demand from the coworking segment rose by 2 per cent compared with 2024. BFSI, consultancy and e-commerce sectors saw their shares rise by 1 per cent each. However, the demand share of IT/ITeS, manufacturing and industrial, and other miscellaneous sectors declined.

 

How did cities perform on office absorption?

 

Bengaluru led with about 14.15 msf of office space leased in 2025, although it recorded a 5 per cent Y-o-Y decline in leasing momentum.

 

In terms of annual net absorption growth, Pune emerged as the fastest-growing market, registering a 63 per cent increase from 4.8 msf in 2024 to 7.8 msf in 2025.

 

Besides Bengaluru, Kolkata also saw a marginal decline of 3 per cent in net office absorption, from 1.18 msf in 2024 to 1.15 msf in 2025. The Mumbai metropolitan region (MMR), Chennai, Hyderabad and the National Capital Region (NCR) recorded increases of 15 per cent, 12 per cent, 9 per cent and 7 per cent, respectively.

 

What about new office supply and vacancies?

 

New office completions across the top seven cities rose 8 per cent Y-o-Y to 51.83 msf in 2025, from 48.11 msf in 2024. Bengaluru added the highest new supply at 13.5 msf, up 8 per cent Y-o-Y.

 

MMR and Hyderabad were the only cities to record a decline in new supply, down 35 per cent and 39 per cent, respectively. Kolkata saw the sharpest growth of 317 per cent in new completions, though on a low base, with just 0.13 msf added in 2025 compared with 0.03 msf in 2024.

 

Office vacancy levels across the top seven cities eased marginally to 16.10 per cent in 2025 from 16.50 per cent in 2024. Hyderabad continued to report the highest vacancy rate at 26.3 per cent.

 

How did rentals move in 2025?

 

Average monthly office rentals rose 6 per cent to Rs 92 per square foot in 2025, from Rs 87 per square foot in 2024. Bengaluru recorded the sharpest annual increase of 9 per cent, with average rentals reaching Rs 102 per square foot.