Maintaining a strong momentum since 2023, the commercial office market is on a steady growth path, with a record new leasing volume. Going forward, the commercial office market is on track to breach the 100 msf leasing threshold over 2026-27. 

According to a recent JLL report, the space absorption for 2025 rose to a record high of 57.0 million sq. ft, surpassing the previous year by 14.1% Y-o-Y. This was driven by strong pre-commitments in new completions and new space take-up pointing to business and headcount expansion.Market activity has continued to create successive new peaks since 2023, serving as a strong indicator of the unmatched growth momentum exhibited by India’s office market. The year 2025 established yet another new record with 83.3 million sq. ft of gross leasing volumes for the full year. With global firms accounting for a robust 58.4% share, India’s position as a strategic business hub offering genuine structural tailwinds was reaffirmed during a period marked by global uncertainties.  

The leading southern cities of Bengaluru and Hyderabad and prime western cities of Mumbai and Pune, recorded their best-ever year in gross leasing terms, showcasing broad-based and secular demand across multiple industry segments. Gross leasing in other cities was also higher year-over-year or at near-similar levels compared to the previous year. This strongly indicates demand dispersion as occupier strategies evolve in a dynamic environment. 

Gross Leasing (million sq. ft)

  Source: Real Estate Intelligence Service (REIS), JLL Research

Global Capability Centers (GCCs) have been the prime movers of Commercial office real estate. “GCCs established themselves as the dominant force in India’s office leasing market in 2025, capturing a commanding 37.7% share of gross leasing activity and achieving record-breaking 31 million square feet of space absorption—the highest annual figure ever recorded for this segment. This exceptional performance was complemented by the Flex segment reaching unprecedented heights with a 26.6% share in Q4 2025, marking its highest quarterly contribution to date. Tech maintained its position as the full-year leader with 25.8% of total leasing volumes, while Manufacturing/Industrial (15.4%) and BFSI (15.2%) segments demonstrated nearly equal market participation. The convergence of record GCC expansion, robust occupancy levels creating space constraints, and a strong deal pipeline positions India’s office market to potentially breach the 100 million square feet leasing threshold within the next two years, representing a transformational milestone for the sector,” says Rahul Arora, Head – Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.

 Flex was the leading occupier segment for the second quarter in a row with its share in the Q4 leasing hitting the highest ever at 26.6%, followed by Tech 21.2%. For full year 2025, Tech remained the driver of leasing activity with a 25.8% share, followed by Flex with 21.5%. Manufacturing/Industrial and BFSI had near similar shares of 15.4% and 15.2% in 2025’s leasing volumes. In absolute terms, Flex and Consulting segments had their best-ever year in terms of leasing.

Leasing activity by occupier category (million sq. ft)

  Source: Real Estate Intelligence Service (REIS), JLL Research

Net absorption breached all previous predictions to hit 57.0 million sq. ft in 2025; highest ever across all years.

In Q4 2025, net absorption was driven by Bengaluru accounting for a sizeable 37.2% share, followed by Hyderabad 

with 15.7% and Delhi NCR with 14.0% shares, respectively.

Net Absorption (million sq ft)

Source: Real Estate Intelligence Service (REIS), JLL Research

The office market delivered exceptional performance in 2025, achieving record-breaking gross leasing of 83.3 million sq. ft and net absorption of 57.0 million sq. ft, with Q4 alone contributing 17.1 million sq. ft in net absorption—the year’s highest quarterly figure. “Bengaluru and Delhi NCR led the market with 29.7% and 21.6% shares respectively of total net absorption, while Delhi NCR demonstrated remarkable resilience with 30% year-over-year growth. Over the past two years, the entry of nearly 200 new Global Capability Centers (GCCs) representing approximately 50% of all active space requirements, combined with robust occupancies creating space constraints for large occupiers, signals strong portfolio expansion ahead. With this momentum and our strong deal pipeline, India’s leasing volumes are well-positioned to potentially reach the 100 million sq. ft milestone within the next two years,” says Dr Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.

Notably, India’s office market continues to defy the global trends of workspace contraction. With the headcount and footprint growth-oriented demand resulting in the strongest net absorption historically for Pan-India, vacancy has now declined to a five-year low with tight, single-digit vacancies prevailing in core markets across all cities. On a q-o-q basis, vacancy declined across all cities. In fact, Bengaluru’s vacancy is now at a four-year low while it is at a historic low in Mumbai and Delhi NCR in the past fifteen years.

The year 2026 presents a strong demand outlook, driven by structural factors, creating a sustained growth runway.  India successfully bucked the global uncertainties and headwinds to emerge as a stronger office market displaying growth across both headcount and real estate footprint metrics. Demand from GCCs – both existing ones and new country entrants remains strong, with nearly 200 new GCCs making their way into the country over the past two years. With GCCs making up ~50% of all active space requirements driven by international banking and financial services players’ appetite for offshore operational centres, complemented by the manufacturing sector dynamism fostered through strategic policy initiatives and strong tech R&D background, the growth runway remains intact. With tight vacancy rates indicating a strong appetite for business expansion and headcount growth driven by its deep and rich talent pool, India is strongly entrenched as a core for market-changing, innovation ideas setting the stage for continued market momentum.