India’s office leasing surges 40% in H1 2025: ANAROCK
Bengaluru emerged as the dominant market, capturing 24% market share with 6.55 Mn sq ft absorption, reflecting a 64% Y-o-Y increase.
NCR recorded 5 Mn sq ft absorption, though its 19% market share reflected slower Y-o-Y growth of 7% compared to the other top cities. (Image: Freepik)
India’s office market demonstrated strong momentum in H1 2025, recording net absorption of 26.8 million square feet, representing a 40% increase over H1 2024’s 19.075 Mn sq ft and a 21% growth compared to H1 2019’s 22.11 Mn sq ft, according to ANAROCK data.
This performance reflects the sustained recovery in corporate real estate demand driven by business expansion, return-to-office mandates, and increased hiring across key sectors, including technology, financial services, and manufacturing.
Bengaluru emerged as the dominant market, capturing 24% market share with 6.55 Mn sq ft absorption, reflecting a 64% Y-o-Y increase. The southern region, comprising Bengaluru, Hyderabad, and Chennai, collectively accounted for 49% of total absorption at 13.05 Mn sq ft, driven by robust ITITeS sector expansion and the emergence of Global Capability Centers.
The western markets of MMR and Pune contributed 31% of total net absorption at 8.3 Mn sq ft. While MMR recorded moderate growth of 43% to reach 4.5 Mn sf, benefiting from its financial services hub status and improved connectivity projects, Pune witnessed exceptional growth of 188% to 3.8 Mn sq ft, supported by increased manufacturing activity and service sector expansion following infrastructure improvements.
NCR recorded 5 Mn sq ft absorption, though its 19% market share reflected slower Y-o-Y growth of 7% compared to the other top cities.
The eastern region, represented by Kolkata, faced challenges with absorption declining 51% to 0.45 Mn sq ft, reflecting limited corporate expansion. The city’s 2% market share underscores the need for enhanced business environment initiatives to attract greater corporate interest and investment in the region.
Commenting on the same, Peush Jain, MD – Commercial Leasing & Advisory, ANAROCK Group, sais, “New office supply increased 25% to 24.51 million square feet, creating balanced market dynamics. Vacancy rates improved marginally to 16.3%, and average rentals grew 4% to INR 88 per square foot per month. The IT-ITES sector dominated with 29% market share, followed by co-working spaces at 22%.”
Market fundamentals remain healthy, supported by Global Capability Centre expansion and sustained corporate confidence, positioning the sector for continued growth through 2025.
New Office Supply
India’s office real estate market demonstrated robust momentum in the first half of 2025, with new supply reaching 24.51 Mn sq ft, representing a substantial 25% increase compared to 19.65 Mn sq ft delivered in H1 2024. This growth trajectory also reflects a modest 2% improvement over the corresponding period in 2019.
In terms of regional performance of India’s top office markets, the Southern region emerged as the dominant contributor, accounting for 53% of total new supply, with Bengaluru leading at 6.91 Mn sq ft (28% market share), followed by Hyderabad at 4.7 Mn sq ft (19%) and Chennai at 1.5 Mn sq ft (6%).
Bengaluru’s 26% year-on-year growth reflects continued investor confidence and the city’s established position as India’s technology hub. In comparison, Hyderabad faced a 17% decline, likely due to project delivery delays and a cautious development approach.
The Western region, comprising MMR and Pune, contributed 31% of the total supply. Pune emerged as the standout performer with an exceptional 533% growth, delivering 5.7 Mn sq ft compared to just 0.9 Mn sq ft in H1 2024. This dramatic surge stems from the completion of several large-scale IT parks and increased corporate expansion into Pune as a cost-effective alternative to Mumbai.
Conversely, MMR experienced a 45% decline to 1.9 Mn sq ft, attributed to land acquisition challenges, regulatory delays, and developers’ preference for refurbishment over new construction in the saturated Mumbai market.
The Northern region (NCR) witnessed 35% Y-oY growth, registering 3.7 Mn sq ft new supply. The Eastern region, represented by Kolkata, remained marginal with minimal supply addition of 0.1 Mn sq ft, reflecting limited corporate demand and slower economic activity in the area.
Key Data
• Net Office Absorption: 26.8 million square feet in H1 2025, representing a robust 40% year-on-year increase from 19.08 Mn sq ft in H1 2024
• Top Markets: Bengaluru leads with 64% growth, Pune rockets 188% in office absorption & 533% in new supply
• New Office Supply: 24.51 Mn sq ft delivered in H1 2025, marking a 25% growth compared to 19.65 Mn sq ft in the previous year
• Average Office Rentals: INR 88/sq ft per month in H1 2025, reflecting a steady 4% increase and demonstrating stable pricing dynamics despite strong demand
• Office Vacancy: Dips to 16.3%, rentals rise 4% amid strong demand in India’s top cities
• Tech Sector: Drives 29% of leasing share, co-working & BFSI also strong performers
• Market Vacancy Rate: 16.3% in H1 2025, showing marginal improvement from 16.7% in H1 2024, indicating healthy market equilibrium
• Large Transaction Dominance: 57% of all office deals exceeded 0.1 Mn sq ft, up from 52% in H1 2024, reflecting corporate preference for larger consolidated spaces
• Global Capability Centres: GCCs drove office demand in H1 2025, leasing 5.45 Mn sq ft in Bengaluru, 2.81 Mn sq ft in NCR, 2.77 Mn sq ft in Pune, 0.95 Mn sq ft in Chennai, and 1.93 Mn sq ft in Hyderabad
