Despite global uncertainty and IT sector layoffs, India’s office market experienced a 34% year-over-year surge in 2025, with 42 million sq. ft. of absorption across the top cities. Led by Bengaluru, Pune, and the Delhi-NCR region, demand for Grade A and flexible workspaces remains strong as GCCs, coworking operators, and BFSI firms drive leasing momentum.
Office Demand Soars Despite Global Uncertainty
India’s office real estate sector continues to defy global pressures—from trade tariffs to geopolitical tensions and IT layoffs. According to new data, office space absorption surged by 34%, rising from approximately 31.3 million sq. ft. in 2024 to 42 million sq. ft. in the first nine months of 2025 across the top seven cities.
This robust performance achieves absorption levels even higher than the 2019 pre-pandemic peak of 32.26 million sq. ft., underscoring how India’s commercial real estate market has not only recovered but also expanded beyond pre-COVID benchmarks.
Average office rents also increased by 6% year-on-year, from ₹85 per sq. ft. to ₹90 per sq. ft. per month. Bengaluru led the surge with a 9% rental hike, reaffirming its dominance as India’s tech and innovation hub.
Strong Fundamentals, Lower Vacancies
Even with new project completions, overall vacancy rates dipped from 16.7% to 16.2%, reflecting healthy occupier demand. Chennai recorded the lowest vacancy rate at 8.9%, followed by Pune and Bengaluru, both of which have seen sustained leasing interest from IT, BFSI, and coworking operators.
Pune’s rise has been particularly striking — the city posted a 97% jump in net absorption and an astonishing 168% growth in new office completions. This growth mirrors the broader trend of corporates expanding into emerging business districts with Grade A facilities and sustainability features.
GCCs and Coworking Operators Lead the Charge
“Multiple factors are driving office space demand in the country despite all headwinds. GCCs are a major driver of office space leasing in the top 7 cities,” says Anuj Puri, Chairman of Anarock Group.
Out of the 58.28 million sq. ft. of gross leasing between January and September 2025, Global Capability Centers (GCCs) accounted for over 40%, or roughly 23.3 million sq. ft. Bengaluru topped the charts with 8.3 million sq. ft., followed by Pune (3.73 million sq. ft.) and Chennai (3.57 million sq. ft.).
Coworking operators have also solidified their position in the market, accounting for 23% of total leasing, second only to IT/ITeS, which holds 27%. The BFSI sector followed with 18%, driven by the ongoing evolution of hybrid work and corporates seeking flexible, scalable solutions.
Supply Keeps Pace with Demand
Developers are responding quickly to the surge in demand for Grade A, sustainability-certified spaces. Many occupiers now prioritise offices equipped with wellness zones, advanced tech infrastructure, and green credentials. As Anuj Puri explains, “Several companies are looking for high-quality Grade A office spaces with better infrastructure and sustainability features. Supply is following this growing demand.”
This alignment of rising corporate expectations with supply-side response highlights the sector’s resilience and maturity. Backed by India’s strong economic fundamentals and expanding population, the country’s office market is well-positioned for sustained growth in 2026.
The Road Ahead
The Indian office space sector’s performance in 2025 reinforces its role as a global outlier — stable, scalable, and increasingly sustainable. As GCCs, coworking firms, and traditional corporates expand footprints across emerging corridors, the sector’s resilience suggests that India’s flexible and Grade A office markets are built not just to endure disruption, but to thrive through it.
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