Mumbai: India’s office leasing market recorded robust growth in the first half of 2025, with net absorption rising 40% year-on-year to 26.8 million square feet across the top seven cities, according to ANAROCK data.
The strong momentum underscores the resilience of India’s commercial real estate sector, supported by technology firms, co-working operators, and Global Capability Centres (GCCs).
Bengaluru and Pune Lead India’s Office Leasing Growth
Bengaluru remained the top market with 6.55 million sq. ft. absorbed, reflecting 64% growth over last year. Pune emerged as the fastest-growing city, recording an impressive 188% increase in office absorption and a 533% surge in new supply. Other key markets such as NCR, Hyderabad, and Chennai also witnessed strong leasing activity.
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Balanced Market Dynamics with Rising Rentals
New office supply rose 25% YoY to 24.51 million sq. ft., creating a healthier supply-demand balance. Vacancy rates improved slightly to 16.3%, down from 16.7% last year, while average rentals increased 4% to ₹88 per sq. ft. per month. Large transactions dominated the market, with 57% of all office deals exceeding 0.1 million sq. ft., reflecting corporates’ preference for consolidated spaces.
Tech Sector and Co-Working Spaces Drive Office Leasing Demand
The IT-ITES sector accounted for 29% of the total leasing activity in H1 2025, while co-working operators contributed 22%. BFSI also remained a key driver of demand. The strong inflow of GCCs bolstered overall absorption, with Bengaluru leasing 5.45 million sq. ft., NCR 2.81 million sq. ft., Pune 2.77 million sq. ft., Hyderabad 1.93 million sq. ft., and Chennai 0.95 million sq. ft..
Peush Jain, MD – Commercial Leasing & Advisory, ANAROCK Group, says, “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%.”
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Positive Outlook for India’s Office Leasing Market in 2025
With sustained demand from technology companies, co-working operators, and GCCs, India’s office leasing sector is well-positioned for continued growth in the second half of 2025. Rising rentals, reduced vacancies, and corporate preference for larger office spaces reinforce the sector’s healthy fundamentals.
