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Office leasing hits record 86.4 million sq ft in 2025; Bengaluru leads with 28.7 million sq ft
Office leasing touched 86.4 msf in 2025, a 20% YoY surge. Bengaluru remained the largest office market, with 28.7 msf leased, of which 63% was occupied by GCCs
India’s office real estate market recorded gross leasing of 86.4 million sq ft (msf) in 2025, up 20% from 71.9 million sq ft in 2024, surpassing the previous peak, and rents grew between 1% and 16% year-on-year. Bengaluru retained its position as the country’s largest office market, with 28.7 million sq ft leased, of which 63% was occupied by Global Capability Centres (GCCs), according to a report by Knight Frank India.
The office leasing also represents a 43% rise over the pre-pandemic high recorded in 2019, highlighting the sustained expansion of occupier demand over the past four years, the report titled India Real Estate- Office and Residential Market (H2 2025) said.
Bengaluru retained its position as the largest office market, with 28.7 million sq ft, up 58.9% from 2024. Of this, 63% of space was taken up by Global Capability Centres (GCCs), highlighting the city’s role as the country’s technology and innovation hub.
As per the data, the gross leasing of office spaces in Hyderabad rose 10% to 11.4 million sq ft during 2025. Pune saw a 36% increase in leasing to 10.8 million sq ft, while Chennai witnessed a 24% rise in demand to 10.1 million sq ft. In Kolkata, the leasing grew 69% to 2.3 million sq ft.
However, the office leasing fell 11% in Delhi-NCR to 11.3 million sq ft. Mumbai too saw a 5% fall at 9.8 million sq ft. In Ahmedabad, the leasing of office space declined 34% to 2 million sq ft during the 2025 calendar year from the preceding year.
Rentals surge and supply growth
The report stated that rents increased across all markets in 2025, consistently higher since 2022, as Indian landlords have been able to negotiate better terms in a market where the strongest office markets have struggled globally.
“As supply remained muted compared to leasing volumes, rents firmed up further across all markets over the course of the year. This dynamic has strengthened landlords’ pricing power, driving rental growth,” it said. Rents grew between 1% and 16% YoY across all markets in H2 2025, with Kolkata growing at 16% YoY while NCR and Hyderabad grew at 10% YoY each, followed by Mumbai and Bengaluru at 6% each.
The report also said that new office completions rose 9% YoY to 54.8 mn sq ft, with Bengaluru (16.2 mn sq ft) and Pune (14.2 mn sq ft) leading new supply additions. Despite this growth, leasing demand outpaced supply, keeping vacancy rates at 15.1% and driving rental appreciation across all major markets, it said.
Grade A office space remained the preferred choice for occupiers, accounting for 91% of total leasing in 2025. Larger deal sizes and long-term commitments reflect evolving occupier strategies prioritising operational efficiency, talent access, and scalable growth.
GCCs emerged as the largest occupier segment
GCCs emerged as the largest occupier segment, accounting for 38% of total absorption at 31.8 million square feet. Flex space accounted for 18.8 million square feet, representing a 22% share of total gross leasing in 2025. Third-party IT services took up 15.3 mn sq ft during the year, accounting for 20% of the transacted area, with its volumes growing 94% YoY, it said.
“The strong momentum continued in the second half of the year. Leasing activity during H2 2025 stood at 37.5 mn sq ft, second only to the exceptionally high absorption recorded in H1 2025 (January – June 2025), 48.9 mn sq ft,” the report said.
Outlook 2026
The report said that the broad-based momentum positions the sector on a strong footing as it enters 2026, with sustained visibility and stability underpinning future growth.
“India’s office market delivered an exceptional performance in 2025, surpassing previous peaks and demonstrating the depth of occupier confidence. With five major markets recording record transactions, the expansion is geographically diversified, and Bengaluru continues to lead alongside Hyderabad, Pune, Chennai, and NCR,” Shishir Baijal, Chairman and Managing Director of Knight Frank India, said.
