Commercial real estate resilient in 2025 as housing sales slow down

Office and industrial leasing hit record highs in 9M 2025, led by GCCs and logistics demand, even as housing sales fall 20 per cent across top Indian cities

India’s commercial real estate sector, encompassing office and industrial & logistics (I&L), has maintained strong leasing momentum through the first nine months of 2025 (9M 2025), even as residential sales showed a decline.

 

According to CBRE, the office segment recorded 59.6 million square feet (msf) of leasing across the top nine cities during January–September 2025, up 2 per cent year-on-year (Y-o-Y). Meanwhile, data from Savills India showed the I&L segment clocking 23.4 per cent growth, with leasing rising to 55.3 msf.

 

In contrast, housing sales fell 20 per cent across the top seven Indian cities during 9M 2025 compared with the same period last year, according to Anarock Research.

   

The office market, however, hit its best-ever leasing performance, largely powered by Global Capability Centres (GCCs), which contributed nearly 39 per cent of the total space taken up. Bengaluru, Pune and Delhi-NCR together accounted for 67 per cent of this GCC-led activity.

 

“This record-breaking performance reflects the resilience and evolving dynamics of India's commercial real estate sector. As occupiers seek future-ready spaces, sustained preference for flight-to-quality assets continues to anchor this momentum. Going forward, the sustained leasing in premium assets is expected to drive vacancy compression, and occupiers are likely to continue exploring peripheral locations, driven by the infusion of high-grade supply,” Anshuman Magazine, chairperson and chief executive officer, India, South-East Asia, Middle East & Africa, CBRE, said.

 

Bengaluru led the overall office absorption during January–September 2025 with 15.1 msf leased, representing 25 per cent of total activity. Mumbai and Delhi-NCR followed with 10.6 msf and 10.2 msf, respectively, together forming 61 per cent of the national total.

 

Technology companies remained the largest occupiers, followed by flexible space operators, and Banking, Financial Services and Insurance (BFSI) firms. Collectively, these three sectors made up 60 per cent of overall leasing.

 

The I&L segment also saw record-high activity during 9M 2025, propelled by rising demand from third-party logistics (3PL), manufacturing and e-commerce firms. Delhi-NCR, Mumbai and Pune accounted for 51 per cent of total leasing across Tier-I and Tier-II markets.

 

“India’s industrial and warehousing sector is entering a defining phase, with 2025 and 2026 expected to set new benchmarks in both demand and supply. The sector is undergoing a significant transformation, driven by the expansion of manufacturing, rising demand for modern grade-A distribution facilities, and the rapid development of Tier-II and Tier-III cities. Government initiatives, coupled with inclusive policies focused on infrastructure and manufacturing, have attracted positive responses globally, bringing in increased equity and investor confidence. As a result, India is steadily emerging as a global hub, repositioning itself as a key industrial and distribution destination,” said Srinivas N, managing director, industrial & logistics, Savills India.

 

While commercial segments surged, residential real estate lost steam after two strong years. Anuj Puri, chairperson, Anarock Group, said, “This (dip) can be largely attributed to the significant increase in housing prices in the last few years, which inevitably made residential homes unaffordable for many. Further, the uncertainties created amid the geopolitical tensions and global economic slowdown have also contributed to this.”

 

Amid the broader slump, Chennai was the only city to register sales growth (5 per cent) during 9M 2025. Analysts attribute this to new project launches, stable pricing, steady infrastructure upgrades, and robust demand from GCC-driven office expansion — factors that continue to draw homebuyers’ interest in the city.