India Office Market 2025: From IT layoffs to record commercial real estate boom

Despite headwinds such as IT layoffs and global tariff tensions, India’s office market posted a record-breaking performance in 2025, with net office leasing across the top seven cities hitting an all-time high of approximately 55.16 million sq ft, marking a 10 per cent year-on-year (YoY) growth from around 49.95 million sq ft in 2024, according to ANAROCK Research.

GCCs drive growth amid IT slowdown

According to the data, Global Capability Centres (GCCs) emerged as key growth drivers, accounting for a record 41 per cent of gross office leasing in 2025, up from 36 per cent in 2024. While Bengaluru — India’s IT hub — saw a 5 per cent decline in net leasing (from 14.87 million sq ft in 2024 to 14.15 million sq ft in 2025), other cities showed strong growth.

Pune recorded the highest annual absorption growth at 63 per cent, with net leasing increasing from 4.8 million sq ft in 2024 to 7.8 million sq ft in 2025.

Other notable trends include:

Kolkata experienced a 3 per cent drop in net absorption, from 1.18 million sq ft to 1.15 million sq ft.

MMR, Chennai, Hyderabad, and NCR saw net leasing rises of 15 per cent, 12 per cent, 9 per cent, and 7 per cent, respectively.

New office supply on the rise: City-wise trends

The top seven cities collectively recorded an 8 per cent increase in new office completions, from 48.11 million sq ft in 2024 to 51.83 million sq ft in 2025. Bengaluru led with 13.5 million sq ft of new supply, up from 12.5 million sq ft the previous year.

On the other hand, MMR and Hyderabad experienced a decline in the new supply, the former adding 6.05 million sq ft (down 35 per cent) and the latter 9 million sq ft (down 39 per cent). Pune, Chennai, NCR, and Kolkata all had marked increases, with Pune having a 103 per cent rise in new office space supply, Chennai 72 per cent, NCR 46 per cent, and Kolkata a remarkable 317 per cent, but Kolkata’s actual figures are still low at 0.13 million sq ft.

Vacancy rates and rentals

Overall office vacancies dropped slightly to 16.10 per cent in 2025 from 16.50 per cent in 2024. Cities with reduced new supply, such as MMR and Hyderabad, saw vacancies decline further — from 15.50 per cent to 14.70 per cent in MMR and from 26.50 per cent to 26.30 per cent in Hyderabad. Hyderabad remains the city with the highest vacancy rate, followed by NCR at 21.70 per cent.

Speaking of average monthly office rents, they climbed a total of 6 per cent across the board, starting from INR 87/sq ft in 2024 and finishing at INR 92/sq ft in 2025. The highest growth of 9 per cent was in Bengaluru, where the rent reached INR 102/sq ft, while Pune and NCR were next with 6 per cent, MMR and Chennai with 5 per cent, Hyderabad with 4 per cent, and Kolkata with 3 per cent.

Sectoral demand insights

IT/ITeS remains the most important sector in terms of office space size demand, representing 27 per cent of total rentals, with coworking (2 per cent) and BFSI (18 per cent) following. The statistics reveal that the tenant base is diversifying, with the IT sector being somewhat volatile, but GCCs, financial institutions, and flexible workspace operators are gradually providing constant support to the market.