India’s commercial office real estate sector continues its strong growth trajectory even as the residential segment shows signs of stabilization. According to ANAROCK Research, average office rentals across the top seven cities rose 6% year-on-year, from approximately INR 85 per sq. ft. in 9M 2024 to INR 90 per sq. ft. in 9M 2025. Despite a surge in new completions, vacancy levels dipped marginally by 3%, settling at 16.20%.

Global headwinds including tariffs, geopolitical tensions, and layoffs in IT/ITeS sectors seem to have had no negative impact on office space demand in the top cities. Office absorption continued to soar by 34% – from approx. 31.31 Mn sq. ft. in 9M 2024 to approx. 42 Mn sq. ft. in 9M 2025. Back in the corresponding period in 2019 when office demand was high, the net absorption stood at approx. 32.26 Mn sq. ft. in the top 7 cities – indicating a 30% growth in 2025.

Among the cities, Pune witnessed the highest growth of 97% in net office absorption – from 3.14 Mn sq. ft. in 9M 2024 to approx. 6.2 Mn sq. ft. in 9M 2025. Kolkata was the only city to record a decline in net office leasing, of 19%.

Bengaluru witnessed the highest net office leasing of approx. 9.95 Mn sq. ft., followed closely by Delhi-NCR with net office leasing of approx. 8.2 Mn sq. ft. and MMR with approx. 6.6 Mn sq. ft.

“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,” said Anuj Puri, Chairman – ANAROCK Group. “For instance, out of the total gross office leasing of 58.28 Mn sq. ft. in 9M 2025, over 40% or approx. 23.34 Mn sq. ft. was leased by the GCCs alone. Bengaluru saw the highest gross leasing of 8.3 Mn sq. ft. by GCCs, followed by Pune with 3.73 Mn sq. ft. and Chennai with 3.57 Mn sq. ft.”

“Several companies are now looking for high-quality Grade A office spaces with better infrastructure and amenities, and green-certified sustainability features,” added Puri. “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.”

Meanwhile, new office completion in the top 7 cities witnessed a 15% jump in the period – from approx. 34.07 Mn sq. ft. in 9M 2024 to 39.21 Mn sq. ft. in 9M 2025. Among the top cities, Pune again saw the highest growth in office completions – 168% – in the given period.

In terms of overall new office supply, Bengaluru witnessed the highest at approx. 10.41 Mn sq. ft., followed by Pune with approx. 9.2 Mn sq. ft. Hyderabad and MMR were the only two cities to see yearly declines in new office completions – 39% and 41%, respectively.

 Sector-wise Leasing Trends

Predictably, IT/ITeS comprised the largest share of 27%, followed by coworking with 23% and BFSI with a 18% share. Compared to last year’s corresponding period, the IT/ITeS sector’s leasing share declined marginally by 1%. On the other hand, coworking saw an overall share increase of 2% – from a 21% share in 9M 2024 to a 23% share in 9M 2025.

Demand for flexible workspaces has been evolving post-pandemic, with companies adapting to hybrid work models, cost efficiency, and flexibility. Start-ups and corporates and several other enterprises with s hybrid work model prefer coworking spaces over regular office spaces.