India’s office market demonstrated strong momentum in H1 2025, recording net absorption of 26.8 million square feet, representing a 40% increase over H1 2024’s 19.075 Mn sq ft and a 21% growth compared to H1 2019’s 22.11 Mn sq ft. This performance reflects the sustained recovery in corporate real estate demand driven by business expansion, return-to-office mandates, and increased hiring across key sectors, including technology, financial services, and manufacturing.

Bengaluru emerged as the dominant market, capturing 24% market share with 6.55 Mn sq ft absorption, reflecting a64% Y-o-Y increase. The southern region, comprising Bengaluru, Hyderabad, and Chennai, collectively accounted for 49% of total absorption at 13.05 Mn sq ft, driven by robust ITITeS sector expansion and the emergence of Global Capability Centers.

The western markets of MMR and Pune contributed 31% of total net absorption at 8.3 Mn sq ft. While MMR recorded moderate growth of 43% to reach 4.5 Mn sf, benefiting from its financial services hub status and improved connectivity projects, Pune witnessed exceptional growth of 188% to 3.8 Mn sq ft, supported by increased manufacturing activity and service sector expansion following infrastructure improvements.

NCR recorded 5 Mn sq ft absorption, though its 19% market share reflected slower Y-o-Y growth of 7% compared to the other top cities.

The eastern region, represented by Kolkata, faced challenges with absorption declining 51% to 0.45 Mn sq ft, reflecting limited corporate expansion. The city’s 2% market share underscores the need for enhanced business environment initiatives to attract greater corporate interest and investment in the region.

Commenting on the same, Peush Jain, MD – Commercial Leasing & Advisory, ANAROCK Group, sais, “New office supply increased 25% to 24.51 million square feet, creating balanced market dynamics. Vacancy rates improved marginally to 16.3%, and average rentals grew 4% to INR 88 per square foot per month. The IT-ITES sector dominated with 29% market share, followed by co-working spaces at 22%.”

Market fundamentals remain healthy, supported by Global Capability Centre expansion and sustained corporate confidence, positioning the sector for continued growth through 2025.

Key Data

• Net Office Absorption: 26.8 million square feet in H1 2025, representing a robust 40% year-on-year increase from 19.08 Mn sq ft in H1 2024

• Top Markets: Bengaluru leads with 64% growth, Pune rockets 188% in office absorption & 533% in new supply

• New Office Supply: 24.51 Mn sq ft delivered in H1 2025, marking a 25% growth compared to 19.65 Mn sq ft in the previous year

• Average Office Rentals: INR 88/sq ft per month in H1 2025, reflecting a steady 4% increase and demonstrating stable pricing dynamics despite strong demand

• Office Vacancy: Dips to 16.3%, rentals rise 4% amid strong demand in India’s top cities

• Tech Sector: Drives 29% of leasing share, co-working & BFSI also strong performers

• Market Vacancy Rate: 16.3% in H1 2025, showing marginal improvement from 16.7% in H1 2024, indicating healthy market equilibrium

• Large Transaction Dominance: 57% of all office deals exceeded 0.1 Mn sq ft, up from 52% in H1 2024, reflecting corporate preference for larger consolidated spaces

• Global Capability Centres: GCCs drove office demand in H1 2025, leasing 5.45 Mn sq ft in Bengaluru, 2.81 Mn sq ft in NCR, 2.77 Mn sq ft in Pune, 0.95 Mn sq ft in Chennai, and 1.93 Mn sq ft in Hyderabad