Office rentals in top cities surge 6% in 9M 2025, vacancy dips 3%: Anarock

Average office rentals in India's top cities rose to nearly ₹90 per sq ft in 2025, while vacancy fell to 16.2% amid rising absorption and steady demand, says Anarock Research

India’s commercial office real estate sector continued its steady growth across the top seven cities, with average monthly rentals rising 6 per cent year-on-year (Y-o-Y) to nearly ₹90 per square feet in the first nine months (9M) of 2025 from around ₹85 per square feet in the same period last year, according to real estate consultant Anarock Research. 

 

Meanwhile, average vacancy levels dipped by 3 per cent annually to 16.2 per cent in the 9M period of 2025, from 16.7 per cent the previous year. Chennai stood out as the only market with a single-digit vacancy rate of 8.9 per cent, the lowest among major cities. 

   

“Multiple factors are driving office space demand in the country despite all headwinds. GCCs are a major driver of office space leasing in the top 7 cities. Several companies are now looking for high-quality Grade A office spaces with better infrastructure and amenities, and green-certified sustainability features,” Anuj Puri, chairman, Anarock Group, said. 

 

“This has also increased the demand for new office spaces equipped with these amenities and features. Supply is following this growing demand. Also, India’s economy and demography continue to grow, giving both domestic and multi-national businesses headroom to expand their operations,” he added. 

 

Despite headwinds like trade tariffs, geopolitical tensions, and layoffs in the information technology (IT) and information technology-enabled services (ITeS) sectors, demand for office space in India’s top cities has remained remarkably resilient. Even as major IT firms such as Tech Mahindra, Wipro, TCS, and Infosys undertake large-scale restructuring and workforce rationalisation, leasing activity continues to hold steady.

 

Office space absorption continued its upward trajectory, rising 34 per cent to around 42 million square feet in 9M 2025 from approximately 31.3 million square feet in the same period last year. In comparison, during the corresponding period in 2019 — when office demand was considered robust — net absorption across the top seven cities stood at about 32.3 million square feet , underscoring a 30 per cent increase in 2025 levels over the pre-pandemic peak.

 

Pune led the surge in net office absorption, rising 97 per cent to around 6.2 million square feet in 9M 2025 from 3.14 million square feet in 9M 2024. Kolkata was the only market to see a 19 per cent decline. Bengaluru topped leasing at 9.95 million square feet, followed by Delhi-NCR (8.2 million square feet) and MMR (6.6 million square feet).

 

New office completions across the top seven cities rose 15 per cent Y-o-Y to 39.21 million square feet in 9M 2025. Pune led with a 168 per cent  surge, while Bengaluru recorded the highest supply at 10.41 million square feet. Hyderabad and MMR saw sharp declines.

 

IT and ITeS continued to dominate office leasing with a 27 per cent share, followed by coworking at 23 per cent and BFSI at 18 per cent. While IT and ITeS dipped marginally by 1 per cent Y-o-Y, coworking rose to 23 per cent, driven by rising demand for flexible workspaces amid hybrid models, cost optimisation, and startup expansion.