India sees highest ever office leasing in H1 2025 at 48.9 mn square feet

Strong demand from Global Capability Centres and flexible office spaces drove India's office leasing to a record 48.9 million sq ft in the first half of 2025

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Office space leasing in India’s eight major cities reached 48.9 million square feet in the first half of 2025—marking the highest-ever volume for a six-month period. This rise was primarily fuelled by steady demand from Global Capability Centres (GCCs), renewed interest in third-party IT services, and the growing popularity of flexible workspaces, according to data from Knight Frank India.

 

Grade A offices remain a priority

 

Large companies have been focusing on acquiring high-quality, future-ready Grade A office spaces to support their long-term plans. Bengaluru led the leasing activity, followed by Delhi-NCR and Pune. As demand continues to surpass new supply, vacancy rates have been falling, and rental prices have risen in key markets. This trend reflects strong occupier confidence and suggests that India’s commercial office sector is poised for further growth in the latter half of the year.

 

Bengaluru leads with record absorption

 

Bengaluru recorded its highest-ever leasing for a half-year period, absorbing 18.2 million square feet of space. The majority of this—55 per cent—was taken up by GCCs. Notably, 46 per cent of the area leased was through pre-commitments, reflecting robust demand for ready-to-use office spaces and a push from tenants to secure future inventory early.

 

Mixed performance across other metros

 

Only Mumbai and Ahmedabad saw a decline in office leasing volumes in the first half of 2025, largely due to a high base in the previous year. In Mumbai, leasing dropped by 5 per cent to 5.5 million square feet, while Ahmedabad recorded a 51 per cent fall, leasing just 0.8 million square feet between January and June.

 

In contrast, Pune reported a 17 per cent increase, reaching 5.1 million square feet. Delhi-NCR registered a 27.5 per cent growth, touching 7.2 million square feet. Hyderabad followed with a 16 per cent rise to 5.9 million square feet. Chennai saw a notable surge of 68 per cent, also reaching 5.1 million square feet.

 

New completions slow amid developer focus shift

 

New office space completions were recorded at 20.1 million square feet during the first half of 2025, reflecting a 20 per cent drop compared to the same period last year. Developers are gradually shifting their focus back to commercial projects after an extended period of attention on residential developments.