Commercial office rentals rise 6% across top 7 cities, Pune shines

The commercial office real estate market continues to strengthen across India’s top seven cities, with monthly office rentals climbing 6 per cent year-on-year-- from Rs 85 per sq. ft. in the first nine months (9M) of 2024 to Rs 90 per sq. ft. in 9M 2025, according to a new report.

The Information Technology and Information Technology Enabled Services (IT/ITeS) sector remained the biggest occupier with a 27 per cent share, followed by coworking spaces at 23 per cent and the banking, financial services and insurance (BFSI) segment at 18 per cent.

Pune saw the most impressive growth among the major cities, recording a massive 97 per cent rise in net office absorption--from 3.14 million sq. ft. in 9M 2024 to nearly 6.2 million sq. ft. this year. Kolkata was the only city to register a decline, with leasing activity dropping by 19 per cent. Bengaluru maintained its top position with around 9.95 million sq. ft. of net office leasing, followed by Delhi-NCR at 8.2 million sq. ft. and the Mumbai Metropolitan Region (MMR) at about 6.6 million sq. ft.

Add Zee Business as a Preferred Source

Coworking trend stays strong amid hybrid work culture

Coworking spaces have become increasingly popular to the extent that a larger number of firms began utilising a combination of on-site and remote work, which was the main reason for this trend. Flexibility and cost advantages were further pointed as a major reason behind this trend. Besides, the adaptability and low overhead costs of coworking spaces were driving even start-ups and large companies to choose them over conventional workplaces.

Even though new office completions have been increasing in the major cities, on the other hand, vacancy rates have decreased slightly — from 16.70 per cent in 9M 2024 to 16.20 per cent this year. The report cites Chennai as the winner in terms of the lowest vacancy level with 8.9 per cent.

Also Read: GCC-driven office space demand in India rises 8% in January-September: Report

GCCs fuel leasing momentum across metros

Global Capability Centres (GCCs) remain a key growth engine for India’s office space market. They accounted for more than 40 per cent of the total gross leasing -- around 23.34 million sq. ft. out of 58.28 million sq. ft. recorded in 9M 2025. Bengaluru led GCC leasing activity with 8.3 million sq. ft., followed by Pune with 3.73 million sq. ft. and Chennai with 3.57 million sq. ft.

“Multiple factors are driving office space demand in the country despite all headwinds. GCCs are a major driver of office space leasing in the top 7 cities,” said Anuj Puri, Chairman – ANAROCK Group. “For instance, out of the total gross office leasing of 58.28 Mn sq. ft. in 9M 2025, over 40 per cent or approx. 23.34 Mn sq. ft. was leased by the GCCs alone. Bengaluru saw the highest gross leasing of 8.3 Mn sq. ft. by GCCs, followed by Pune with 3.73 Mn sq. ft. and Chennai with 3.57 Mn sq. ft.”

He further said, “Several companies are now looking for high-quality Grade A office spaces with better infrastructure and amenities, and green-certified sustainability features. This has also increased the demand for new office spaces equipped with these amenities and features. Supply is following this growing demand. Also, India’s economy and demography continue to grow, giving both domestic and multi-national businesses headroom to expand their operations.”