India’s office leasing hit a record 48.9 million sq ft in H1 2025, growing 41% YoY, driven by strong demand from Global Capability Centres, IT services, and flex operators. Bengaluru led the surge, while falling supply and rising rents signalled a tightening market, particularly in key hubs such as Mumbai and Hyderabad.
India’s commercial office market is on an unprecedented growth trajectory, with gross leasing volumes touching 48.9 million sq ft in the first half of 2025—a 41% year-on-year jump, according to Knight Frank’s latest report. This marks the highest-ever H1 performance recorded across the top eight cities, signalling strong occupier confidence and economic momentum.
The surge is primarily driven by Global Capability Centres (GCCs), which leased 19.1 million sq ft during this period—a 96% increase over the previous year. GCCs accounted for 39% of all leasing, reaffirming India’s position as a preferred hub for global enterprises. Third-party IT service providers followed with a 22% share and a 43% growth, while flex operators contributed 21%, reflecting a rising preference for agile, scalable workspace models.
India-facing businesses also played a significant role, accounting for 18% of total leasing. Together, these four occupier groups have redefined the country’s commercial space dynamics, underpinned by growing digitalisation, outsourcing demand, and hybrid workforce strategies.
However, while demand has soared, supply hasn’t kept up. Office space completions fell 20% YoY to 20.1 million sq ft, creating a widening supply-demand gap. The shortfall is particularly stark in key tech hubs—Bengaluru saw a 73% decline in completions, while Hyderabad followed closely at 72%. This lag in new supply is beginning to affect availability and pricing.
As a result, vacancy rates tightened marginally to 14.7% from 15%, with six out of the top eight cities showing contraction. Mumbai and Hyderabad saw the sharpest rental spikes, up 12% and 10% respectively. Mumbai’s average rent now stands at ₹129 per sq ft per month, making it one of the priciest office markets in the country.
Bengaluru retained its title as the top-performing market, clocking 18.2 million sq ft of leasing activity—a staggering 116% increase over H1 2024. NCR followed at 7.2 million sq ft and Pune at 5.1 million sq ft, both registering their highest H1 figures to date. Even Kolkata, a traditionally slower market, saw 60% YoY growth.
Knight Frank’s data paints a clear picture: the Indian office market is thriving, but the imbalance between rising demand and slowing supply could put pressure on occupiers in the coming quarters. With companies looking for larger, tech-enabled, and flexible spaces, developers and landlords may need to accelerate pipeline deliveries to stay ahead of this demand curve.
As India cements its position as a global business and innovation hub, the first half of 2025 has proven that its commercial real estate sector is not just rebounding—it’s setting new benchmarks.
