Top cities see lowest office vacancies in years amid business expansion

India’s office market recorded its lowest vacancy rate in the past 17 quarters during the July-September period this year, according to a report by The Economic Times, citing JLL India data. This is in contrast to the global trend, where office spaces are shrinking.

 

The growth was driven by strong leasing activity and robust net absorption, as companies expanded their workforce and office space in major cities.

 

Vacancy rates fell to 15.7 per cent, down from 16.9 per cent a year ago and 16.1 per cent in the previous quarter. Bengaluru saw a three-year low in vacancies, while Mumbai and Delhi-NCR recorded their lowest rates in 15 years. Other key cities like Hyderabad also saw yearly and quarterly declines.

 

Leasing expected to reach record-high

With strong deal activity and steady growth, India’s office leasing is expected to reach at least 80 million square feet this year, the report said.

 

In the first nine months of 2025, the top seven cities recorded nearly 40 million square feet of net absorption, a 25 per cent increase compared to the same period last year. The July-September quarter alone saw 15.76 million square feet absorbed, up 40 per cent from the previous quarter.

 

January-September marked record net absorption in Delhi-NCR, Bengaluru, Pune, and Chennai. Bengaluru led with 26.5 per cent of the activity, followed by Delhi-NCR at 24.8 per cent and Hyderabad at 13.7 per cent.

GCCs drive demand

Demand was largely driven by global capability centres (GCCs), including new entrants, which accounted for about half of all active space requirements.

 

In its report titled 'India Office Market Dynamics – Q2 2025', JLL said, "Demand from GCCs, both existing ones and new country entrants, remains strong, making up to 50 per cent of all active space requirements.

 

The revival of tech-driven work, particularly in artificial intelligence and other emerging technologies, further strengthened India’s outsourcing market, the report said. IT and IT-enabled services led demand with 28 per cent of leased space, flexible workspaces accounted for 19 per cent, and banking, financial services, insurance (BFSI), and manufacturing each held 15–16 per cent.