Mumbai: India’s commercial real estate market continues to show strong momentum, with net office leasing across the top seven cities rising 40% year-on-year in H1 2025, reveals new data from ANAROCK Research.
Total net absorption reached 26.8 million sq. ft., up from 19.08 million sq. ft. during the same period in 2024.
Office Leasing: Bengaluru Tops the Charts
Bengaluru topped the charts with 6.55 million sq. ft. leased, up 64% from H1 2024. Pune followed with the highest percentage growth at 188%, increasing from 1.32 million sq. ft. to 3.8 million sq. ft..
Other major contributors included the NCR (5 million sq. ft.), MMR (4.5 million sq. ft.), and Hyderabad (4.2 million sq. ft.).
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In contrast, Kolkata was the only market to see a decline in leasing activity, with a 51% drop in net absorption.
New office completions across the top cities reached 24.51 million sq. ft., a 25% YoY increase. Pune posted the most significant spike with a 533% jump, delivering 5.7 million sq. ft. compared to 0.9 million sq. ft. in H1 2024.
Bengaluru added the highest volume of new supply at 6.91 million sq. ft. (26% YoY growth), while MMR and Hyderabad were the only two markets to see a drop in new completions.
IT/ITeS and Co-Working Dominate Demand
IT/ITeS continued to dominate demand with a 29% share, followed by co-working spaces (22%), and BFSI (18%). Emerging contributions were also seen from consulting and e-commerce sectors.
“The Indian office market outpaced the residential segment in H1 2025,” said Peush Jain, MD – Commercial Leasing & Advisory, ANAROCK Group. “Strong economic fundamentals, a resilient IT sector, and expanding GCCs have significantly boosted office leasing activity across Indian cities.”
Vacancy Rates and Rentals Show Positive Trends
Overall vacancy levels across the top 7 cities declined marginally from 16.70% in H1 2024 to 16.30% in H1 2025. However, vacancy rates rose in MMR (15.10%) and Hyderabad (26.60%) due to reduced new supply absorption.
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Meanwhile, average office rentals increased 5% YoY, reaching ₹88 per sq. ft., up from ₹84 per sq. ft. in H1 2024. Chennai recorded the highest growth in rentals at 6%, followed by Bengaluru and NCR with 5% increases each.
As India maintains its position as one of the world’s fastest-growing economies, demand for Grade A office leasing space is expected to continue its upward trajectory into the second half of 2025.
