India’s office leasing market recorded a strong 24% growth in the first half of 2025, driven predominantly by demand in Mumbai, Pune, and the National Capital Region (NCR). The total leasing volume reached a record 48.9 million square feet across eight major cities, marking the highest ever for a six-month period.
City-wise Performance
Bengaluru led leasing activity with 18.2 million sq. ft. absorbed, majority by Global Capability Centres (GCCs), with 46% of leasing done through pre-commitments. Delhi-NCR followed, growing 27.5% to 7.2 million sq. ft., while Pune saw a 17% rise to 5.1 million sq. ft. Chennai experienced an impressive 68% surge, matching Pune’s 5.1 million sq. ft. lease. Mumbai and Ahmedabad saw declines of 5% and 51%, respectively, driven by prior high base periods.
Trends Driving Demand
Grade A office spaces remain the focal point for expansion, reflecting occupiers’ preference for modern, flexible workspaces in tech and BFSI sectors. GCCs continue to drive demand, accounting for 55.6% of leasing in H1, especially in BFSI and manufacturing verticals. Tech firms (both domestic and global third-party providers) contributed significantly to the leasing spree, targeting technology-enabled office environments.
Supply & Vacancy Dynamics
New office completions stood at 20.1 million sq. ft., marking a 20% decline from last year as developers shift focus between commercial and residential segments. Vacancy rates remain healthy at around 16.1% for top cities, showing robust absorption against moderate supply growth. Rental values have increased across metros, with Hyderabad, Kolkata, and Bengaluru leading the growth.
FlexInsights Take
India’s office leasing momentum in H1 2025 signals strong occupier confidence amid evolving workspace needs like hybrid work and flexible setups. The continuous growth by GCCs and tech firms reflects India’s rising importance as a global delivery hub. Although Mumbai’s slight dip contrasts with gains elsewhere, major metros like Bengaluru and Delhi NCR power the market’s upward trajectory.
Sustained leasing accompanied by limited new supply should support rents and prompt cautious new development, fostering a healthier market. The focus on Grade A office space underscores a maturing market prioritising quality and flexibility. Overall, India’s office sector remains on a positive growth path, driven by robust economic fundamentals and evolving business models.
