India’s office market hits record leasing in 2025; GCCs emerge as key growth driver

India’s office real estate market has quietly delivered one of its strongest years in over a decade, even as global growth worries, geopolitical tensions and cautious corporate spending weighed on commercial property markets elsewhere. The momentum has been led by Global Capability Centres (GCCs), which have emerged as the backbone of office demand, pushing leasing activity to record levels and sharply improving occupancy across major cities.

A new report by Vestian shows that India’s office absorption touched an all-time high of 78.2 million square feet in 2025, marking an 11 per cent year-on-year increase. At the heart of this growth were GCCs - offshore centres set up by multinational companies for technology, finance, analytics, engineering and innovation which accounted for nearly half of all office leasing during the year.

Equally important, the role of GCCs is changing. These centres are no longer limited to back-office functions. They are increasingly handling core work such as product development, artificial intelligence, data engineering, risk management and digital platform building - areas that demand bigger teams, specialised skills and long-term commitments to office space.

While office markets elsewhere dealt with rising vacancies and cautious expansion plans, India benefited from steady domestic growth and a continuous flow of investment from multinational companies.

Leasing demand was broad-based rather than concentrated in a single sector. Technology companies, banks and financial services firms, consulting players and flexible workspace operators all played a role in driving absorption during the year.

Although developers delivered a record level of new supply during the year, leasing activity comfortably outpaced completions in most cities. This helped absorb available stock and stabilise rental values in key business districts.

Pune was a notable exception, where vacancy rose due to the addition of around 12 million square feet of new office space in a single year. However, even here, demand indicators suggest medium-term absorption as GCC activity expands.

IT–ITeS dominates, but sector mix continues to widen

BFSI and flex spaces followed, each with a 14 per cent share, pointing to increasing diversification in occupier demand. Within IT–ITeS, GCCs played a decisive role. Over half of all IT–ITeS occupiers leasing office space during the year were GCCs. In value terms, they accounted for nearly 60 per cent of the total area transacted by the sector, reflecting a preference for larger, high-quality office campuses.

Bengaluru, Hyderabad lead GCC expansion

Bengaluru remained the clear leader in India’s GCC story in 2025, accounting for nearly a third of total GCC office absorption. With its well-established technology ecosystem, deep talent pool and steady supply of Grade A office space, the city continues to be the first choice for global companies expanding their India operations.

Hyderabad came next with a 19 per cent share, buoyed by comparatively lower office rents, improving infrastructure and strong policy backing for technology-driven investments. Other markets, including the National Capital Region, also recorded a clear pick-up in GCC leasing, as companies increasingly chose to diversify their operations across several cities instead of putting all their expansion into a single location.

Construction activity rises to meet demand

Developers stepped up construction to keep pace with this rising demand. New office completions touched 55.5 million square feet in 2025 - an 8 per cent increase over the previous year and the highest annual supply ever recorded in India.