India’s office real estate market scaled new highs in 2025, with net office leasing across the top seven cities touching an all-time high of approximately 55.16 million sq. ft., marking a 10% year-on-year increase, according to ANAROCK Research. The record performance came despite global headwinds such as IT sector layoffs and geopolitical tariff uncertainties, underlining the sector’s resilience and India’s growing stature as a global office destination.

Strong demand from Global Capability Centres (GCCs), steady expansion by IT/ITeS firms, and rising traction for flexible workspaces continued to drive leasing activity, while new office completions also rose 8% year-on-year to nearly 51.83 million sq. ft. in 2025.

Surprisingly, while Bengaluru led other cities with approx. 14.15 Mn sq. ft. office space leased this year against approx. 14.87 Mn sq. ft. in 2024, the city witnessed a 5% yearly decline in net leasing.

In terms of annual net absorption growth, Pune recorded the highest with 63% – from approx. 4.8 Mn sq. ft. in 2024 to approx. 7.8 Mn sq. ft. in 2025

Besides Bengaluru, Kolkata also witnessed a 3% drop in net office absorption – from approx. 1.18 Mn sq. ft. in 2024 to approx. 1.15 Mn sq. ft. in 2025

MMR, Chennai, Hyderabad, and NCR saw net leasing jump 15%, 12%, 9% and 7% respectively

New Office Supply

In terms of new office completions, the top 7 cities recorded an 8% yearly increase – from approx. 48.11 Mn sq. ft. in 2024 to approx. 51.83 Mn sq. ft. in 2025. Again, Bengaluru beat all other top cities with approx. 13.5 Mn sq. ft. of new office supply added in 2025, against 12.5 Mn sq. ft. in 2024 – an 8% yearly growth.

MMR and Hyderabad were the only cities to see a drop in new supply addition in 2025 – by 35% and 39%, respectively. MMR added approx. 6.05 Mn sq. ft. office space in 2025 against approx. 9.27 Mn sq. ft. in 2024. Hyderabad saw approx. 9 Mn sq. ft. of new supply in 2025, against 12.88 Mn sq. ft. in 2024.

Pune recorded a massive 103% yearly jump in new office supply – from 5.23 Mn sq. ft. in 2024 to over 10.60 Mn sq. ft. in 2025

In Chennai, new office supply rose 72% y-o-y – from 2.27 Mn sq. ft. in 2024 to 3.90 Mn sq. ft. in 2025, while NCR witnessed a 46% rise – from 5.93 Mn sq. ft. in 2024 to 8.65 Mn sq. ft. in 2025.

Kolkata saw the highest 317% yearly growth in new office completions, but this supply is also the lowest at just 0.13 Mn sq. ft. in 2025 against 0.03 Mn sq. ft. in 2024

“India’s office real estate market veritably boomed in 2025, with net absorption and new completions both surging thanks to the country’s robust economic growth,” says Peush Jain, MD – Commercial Leasing & Advisory, ANAROCK Group. “GCCs are leading the charge, capturing a record 41% share of gross absorption — up from 36% in 2024. Drawn by India’s economic strength, stability, and cost advantages, major US corporates are snapping up massive office spaces across our key cities.”

“Sector-wise, IT/ITeS continued to dominate office space demand in 2025 with a 27% overall leasing share,” adds Jain. “Next came the coworking sector with a 23% share, and BFSI with 18%. Interestingly, 2025 saw demand from the coworking segment rise by 2% against 2024. BFSI, consultancy businesses and e-commerce saw their shares grow 1% each; however, IT/ITeS, manufacturing & industrial and miscellaneous other sectors’ demand share dropped.”

Office Vacancies

Office space vacancies across the top 7 cities collectively dropped to 16.10% in 2025 – a marginal improvement over the 16.50% in 2024. With reduced new office supply in MMR and Hyderabad in 2025, office vacancies dropped in both cities – from 15.50% in 2024 to 14.70% in 2025 in MMR, and from 26.50% to 26.30% in Hyderabad. Currently, Hyderabad has the highest vacancy rate among the top 7 cities, followed by NCR with 21.70%.

Office Rentals

Average monthly office rentals increased by a marginal 6% – from INR 87/sq. ft. in 2024 to INR 92/sq. ft. in 2025. Bengaluru recorded the highest 9% yearly rise – from INR 94/sq. ft. in 2024 to INR 102/sq. ft. in 2025. Both Pune and NCR recorded 6% yearly increases, while MMR as well as Chennai saw 5% y-o-y jumps. Hyderabad saw a yearly rise of just 4%, while Kolkata witnessed a 3% increase.