Office Leasing in Top 8 Cities Rises 25% to 61 Mn Sq Ft in 2025

Office leasing in 2025 marks a strong resurgence in India’s commercial real estate sector, with net absorption across the top eight cities rising 25% year-on-year to cross 61 million square feet. The surge has been led by Chennai and Delhi-NCR, reflecting renewed occupier confidence, sustained expansion by Global Capability Centres (GCCs), and long-term demand fundamentals supported by infrastructure growth and a deep talent pool.

India’s office market performance in 2025 goes beyond headline numbers. It signals a structural shift toward stable, long-term leasing demand rather than short-term recovery-driven activity, positioning the country as a preferred destination for global enterprises.

How did India’s office market perform in 2025?

Net office leasing in 2025 across India’s top eight cities reached 61.4 million sq ft, up from 49.1 million sq ft in 2024, reflecting a 25% annual increase. This growth was broad-based, with major IT and services hubs posting higher absorption levels, even as a few mature markets saw moderation.

Cities such as Bengaluru, Hyderabad, Pune, Delhi-NCR, and Chennai recorded an increase in net absorption, while Mumbai, Kolkata, and Ahmedabad experienced a marginal decline. Despite this, overall market momentum remained intact, supported by strong leasing activity and expanding occupier requirements.

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Net office leasing across top 8 cities: 2025 snapshot

This distribution highlights how office leasing in 2025 was driven primarily by select high-growth markets rather than uniform expansion across all cities.

Why did Chennai and Delhi-NCR lead office leasing in 2025?

Chennai recorded the sharpest rise in net office leasing in 2025, with absorption nearly tripling compared to the previous year. Net leasing jumped to around 7 million sq ft, driven by a combination of cost competitiveness, infrastructure upgrades, and rising interest from global occupiers.

Key factors supporting Chennai’s growth include:

• Strong GCC expansion across technology, engineering, and manufacturing-linked services
• Availability of large, contiguous Grade-A office spaces
• Competitive rentals compared to other Tier-1 cities
• A growing talent base supported by educational and industrial ecosystems
  
  

As a result, Chennai emerged as a breakout city in office leasing in 2025, transforming from a steady performer into a high-growth office destination.

Why Delhi-NCR saw a sharp rebound in office demand

Delhi-NCR recorded an 82% year-on-year increase in net office leasing in 2025, with absorption touching nearly 11 million sq ft. The recovery was led by strong demand in key micro-markets such as Gurugram and Noida.

Growth drivers in the region included:

• Increased uptake of Grade-A and Grade-A+ office developments
• Large-format leasing by multinational corporations and GCCs
• Improved infrastructure connectivity across NCR corridors
• Competitive rental positioning compared to Mumbai

Delhi-NCR’s performance reinforces its position as one of India’s most important office markets, particularly for enterprises seeking scalable and cost-efficient expansion.

How did other major office markets perform in 2025?

Bengaluru, Hyderabad, and Pune maintain steady momentum

Bengaluru: Stability at a high base

Bengaluru continued to dominate India’s office landscape, recording net leasing of approximately 14.4 million sq ft in 2025. While growth was marginal, the city maintained its leadership due to sustained demand from technology firms and GCCs.

Hyderabad: Consistent mid-teen growth

Hyderabad posted a 15% increase in net office leasing, supported by large transactions in established business districts. The city continues to attract occupiers looking for high-quality office stock at relatively competitive rentals.

Pune: Balanced performance

Pune maintained healthy leasing levels, driven by IT, engineering, and automotive-linked occupiers. Its diversified demand base helped cushion volatility and ensured stable absorption levels.

Why did Mumbai, Kolkata, and Ahmedabad see a decline?

Mumbai experienced a 12% decline in net office leasing in 2025, with absorption falling to 9.6 million sq ft. The dip was attributed to:

• Higher rental levels compared to other cities
• Selective occupier expansion decisions
• Limited availability of large, contiguous spaces in prime locations

Similarly, Kolkata and Ahmedabad saw moderation in leasing activity due to slower decision-making by occupiers and fewer large-scale transactions. Importantly, this decline does not indicate structural weakness but reflects market-specific dynamics.

What leasing trends supported office leasing in 2025?

Gross leasing remains near record levels

Despite fluctuations in net absorption across cities, gross leasing volume remained robust at around 89 million sq ft, matching the previous year’s high. This highlights continued occupier engagement and strong market depth.

Gross leasing stability played a crucial role in supporting office leasing in 2025, even in cities where net absorption moderated.

Why fresh leasing dominated market activity

Fresh leasing accounted for nearly 80% of total transactions, underlining occupiers’ commitment to expansion rather than consolidation.

This trend reflects:

• Long-term confidence in India’s economic and talent fundamentals
• Preference for modern, energy-efficient office buildings
• Strategic expansion by technology firms, GCCs, and flex operators

How Global Capability Centres drove office leasing growth

Why GCCs became the key demand engine

Global Capability Centres emerged as the single largest driver of office leasing in 2025, accounting for nearly one-third of total leasing volume, with absorption touching 29.3 million sq ft.

Sectors leading GCC demand included:

• Technology and digital engineering
• BFSI and fintech
• Research and development
• Product design and analytics

India’s ability to offer skilled talent, cost efficiencies, and scalable office infrastructure has positioned it as a global GCC hub, supporting sustained office leasing in 2025 and beyond.

What happened to supply, vacancy, and rentals in 2025?

Office supply crosses a historic milestone

Office completions exceeded 53 million sq ft in 2025, marking a 17% year-on-year increase and the first time annual supply crossed the 50 million sq ft mark.

Most of this supply comprised Grade-A developments in prime and emerging business districts, aligning well with occupier preferences.

Why vacancy levels declined despite record supply

Despite record completions, overall vacancy levels declined by 210 basis points year-on-year, the sharpest annual drop on record.

Key reasons included:

• Strong net absorption
• Higher pre-commitments in prime projects
• Faster take-up of quality office spaces

Vacancy reduction was observed across most major cities, reinforcing the strength of office leasing in 2025.

Rental growth reflects tightening market conditions

Rental growth was reported across all top eight cities:

• Hyderabad and Mumbai led with 12–14% YoY growth
• Delhi-NCR, Chennai, and Ahmedabad recorded 6–9% increases

Rising rentals signal tightening vacancies and occupiers’ willingness to pay a premium for quality, well-located office assets.

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What does office leasing in 2025 signal for 2026 and beyond?

Long-term outlook for India’s office market

The performance of office leasing in 2025 reflects strong long-term fundamentals rather than a short-lived rebound. Key structural drivers include:

• Expanding GCC presence
• Infrastructure-led business district growth
• A vast, skilled workforce
• Evolving workplace strategies blending flexibility and collaboration

As demand expands into emerging micro-markets, India’s office sector is expected to remain resilient through 2026 and beyond.

Key takeaways for investors, developers, and occupiers

What stakeholders should focus on next

• Investors: Rental growth potential and vacancy compression
• Developers: Grade-A supply, pre-commitments, and ESG-compliant buildings
• Occupiers: Early locking of quality space amid tightening availability

Conclusion

Office leasing in 2025 has reaffirmed India’s position as a global office market leader. With net absorption crossing 61 million sq ft and demand led by Chennai and Delhi-NCR, the sector has demonstrated depth, resilience, and structural strength.

As GCCs expand, infrastructure improves, and occupiers prioritise quality spaces, the momentum built in 2025 is likely to define the next phase of growth for India’s commercial real estate market.