India’s office real estate market is booming, with office demand surging across top cities, positioning India as a key global office destination. “India has solidified its position as the ‘Office of the World,’ with office demand among the highest in Asia, and even globally,” stated Anshul Jain, Chief Executive of Cushman & Wakefield India. This year, India’s gross office leasing volume is expected to surpass a record-breaking 80 million square feet (msf), marking the third consecutive year with over 70 msf of office leasing activity.

With this momentum, rental rates are rising nationwide, driven by large deals from multinational corporations and steady leasing from domestic firms. Despite some supply limitations, especially in major cities, the demand trajectory shows no sign of slowing. Cushman & Wakefield project that leasing activity will remain robust in 2025, with around 74-75 msf in gross office leasing, mainly bolstered by expansions from global and domestic occupiers, especially in top-tier cities. Bengaluru and Hyderabad will lead in new completions, contributing nearly half of the upcoming supply.

India’s Global Capability Centers (GCCs) have also gained significant traction, reshaping the office landscape as multinational corporations increasingly view India as a strategic hub for research, development, and innovation. “GCCs accounted for 30% of total office leasing by Q3 2024, a return to pre-Covid levels,” said Jain. This trend is fueled by India’s skilled talent pool, cost-effective real estate, and advanced digital infrastructure. Mid-sized and large MNCs are expanding their operations in India, reinforcing the country’s leadership in tech offshoring and engineering R&D.

On the residential side, demand for high-end and luxury properties remains robust, especially in cities like Mumbai, Delhi-NCR, Bengaluru, and Hyderabad, which are witnessing growing interest in spacious, amenity-rich homes. Post-Covid, the luxury segment has surged, accounting for 35-40% of total new launches compared to less than 20% before the pandemic. Gurgaon, in particular, stands out as a hotspot for luxury real estate, while Bengaluru and Hyderabad are shifting from traditionally mid-segment markets to embrace high-end properties.

Capital market activity is also expected to remain strong in real estate as developers and investors continue to target prime assets across the residential, office, industrial, and warehousing sectors. Premium office assets in cities like Mumbai, Bengaluru, and Hyderabad are beautiful, as they offer stable, long-term returns, making them a prime focus for global and local institutional investors.

India’s REIT landscape is evolving, with four REITs already listed, three focused on office assets and one on retail. The growth of grade-A office and retail spaces has paved the way for these listings, and experts anticipate further REIT activity. SEBI recently expanded regulations to allow small and medium REITs (SM-REITs) to invest in income-generating properties across sectors, including commercial, rental housing, warehousing, and hotels. This development opens new investment avenues, enabling fractional ownership in real estate, potentially attracting more investors to India’s thriving office market.

India’s real estate market is poised for continued growth, fueled by high demand in office and luxury residential segments. As the sector expands, new REIT opportunities will likely drive investment, solidifying India’s role as a key destination in the global real estate landscape.