Mumbai, July 3, 2025: The Indian office real estate market has witnessed a significant surge in demand, with net office leasing rising 40% year-over-year (YoY) in the top 7 cities during the first half of 2025. According to a report by ANAROCK Research of July 3, the top 7 cities recorded net office leasing of approximately 26.8 million square feet in H1 2025, against nearly 19.08 million square feet in H1 2024.
The top 7 cities are: 👇
- Bengaluru
- Mumbai Metropolitan Region (MMR)
- National Capital Region (NCR)
- Chennai
- Hyderabad
- Pune
- Kolkata
Bengaluru Leads the Way
Bengaluru emerged as the top city in terms of net leasing, with approximately 6.55 million square feet of office space leased in H1 2025, against 4 million square feet in H1 2024 – a 64% yearly increase. Pune recorded the highest annual net absorption growth, with a massive 188% increase – from approximately 1.32 million square feet in H1 2024 to approximately 3.8 million square feet in H1 2025.
New Supply and Vacancy Rates
The top 7 cities recorded a 25% increase in new office completions in H1 2025, with approximately 24.51 million square feet of new supply added, against 19.65 million square feet in H1 2024. Bengaluru again led the way, with approximately 6.91 million square feet of new office supply added in H1 2025. Office space vacancies across the top 7 cities collectively dropped to 16.30% in H1 2025, a marginal improvement over the 16.70% in H1 2024.
Rental Growth
Average monthly office rentals increased by a marginal 5% – from Rs 84 per square foot in H1 2024 to Rs 88 per square foot in H1 2025. Chennai recorded the highest 6% yearly rise in monthly office rentals – from Rs 72 per square foot in H1 2024 to Rs 76 per square foot in H1 2025.
Sector-wise Demand
The IT/ITeS sector continued to dominate office space demand in H1 2025, with a 29% overall leasing share, followed by the coworking sector with a 22% share and BFSI with 18%. “The office real estate market was clearly ahead of its residential counterpart in H1 2025,” says Peush Jain, MD – Commercial Leasing & Advisory, ANAROCK Group. “Both net absorption and new office completions saw high growth, largely because of India’s enduring economic strength.”
Outlook
The Indian office market is expected to continue its growth trajectory, driven by the country’s strong economic fundamentals and increasing demand for office space from various sectors. With the government’s focus on infrastructure development and the growing presence of multinational companies, the office market is likely to remain buoyant in the coming quarters.
