India's office realty set for record year, housing banks on festive lift

Knight Frank report says office leasing may hit 85 msf in 2025, while housing depends on festive demand to regain momentum after a mild sales moderation

India’s office segment is poised for a record-breaking year, with expected gross leasing of 85 million square feet (msf)—over 20 per cent higher than the 2024 record—according to a report by Knight Frank India. Meanwhile, the residential segment, which saw moderation in the first nine months of 2025 (9M 2025), will depend on sales momentum during the traditionally strong festive season.

 

Office leasing grows 24 per cent; housing sales dip slightly

 

Office leasing across the top eight cities grew 24 per cent year-on-year (YoY) to 66.7 million sq ft in 9M 2025, driven by demand from global capability centres (GCCs), flexible workspace operators, and third-party IT service firms. Residential sales during the same period stood at 2.57 lakh units, down 1 per cent YoY.

   

Gulam Zia, senior executive director – valuation, advisory and research, Knight Frank India, said, “We need to hold back and look at what last quarter has in store for us before writing off the residential segment on a downslide. There’s a quarter to go, which is going to be the festive quarter. Let's wait at least for a month or so, because during that month, we will see how festive demand is shaping up. Also, GST reprise has helped the mid to lower end of the market, in the automobiles, electronics, etc., segments. We have seen a huge amount of consumption. That effect is yet to be seen in real estate.”

 

He added that there is no sign of a slowdown yet. “Maybe we are plateauing and reaching that position where much of the growth has been seen.”

 

Quality assets and cost edge drive office momentum

 

For the office segment, growth continues to be driven by the quality of assets and India’s cost advantage, said Viral Desai, senior executive director, occupier strategy and solutions, industrial and logistics, capital markets and retail agency, Knight Frank India.

 

In Q3 2025, office leasing stood at 17.8 million sq ft, down 6 per cent YoY due to a high base effect. GCCs remained the largest occupier group with gross leasing of 5.7 million sq ft. Rents rose across all major markets—Kolkata led with a 14 per cent increase, followed by Mumbai (11 per cent), NCR (9 per cent), Hyderabad (9 per cent), and Bengaluru (6 per cent).

 

Festive quarter to determine housing trajectory

 

Housing sales in Q3 2025 stood at 87,603 units, up 1 per cent YoY, while new launches dipped 2 per cent YoY.

 

Shishir Baijal, chairperson and managing director, Knight Frank India, said, “India’s residential market in Q3 2025 has demonstrated an impressive ability to sustain momentum, and the market is now in its fifth year of an upcycle. Consequently, Y-o-Y growth rate is beginning to rationalise, and we may be entering a prolonged plateau phase. Within a volatile geopolitical environment, India’s macroeconomic conditions remain stable. The rate cut of up to 100 basis points, and liquidity support through the simplification of both direct taxes and GST have collectively strengthened end-user confidence.”

 

Shift towards premium housing continues

 

Units priced below ₹1 crore saw their share in total sales fall to 48 per cent in Q3 2025 from 54 per cent a year ago, while homes priced above ₹1 crore rose to 52 per cent from 46 per cent. Unsold inventory increased 4 per cent YoY to 5.06 lakh units, with higher-end categories contributing more.

 

Price growth remained strong—up 19 per cent in NCR, 15 per cent in Bengaluru, and 13 per cent in Hyderabad, while Mumbai and Pune saw growth of 7 per cent and 5 per cent, respectively.