India’s Office Leasing Reaches Historic 86.4 Million Square Feet in 2025
India’s office real estate market has achieved a remarkable milestone in 2025, recording an unprecedented annual gross leasing of 86.4 million square feet, as revealed in Knight Frank India’s latest report. This figure marks a 20% increase from the previous year and a staggering 43% rise compared to pre-pandemic levels in 2019. The surge in leasing activity reflects a growing confidence among occupiers and highlights India’s emergence as a significant global business hub.
Record Leasing Activity and Market Dynamics
The office real estate sector in India has experienced a historic performance, with leasing activity reaching an all-time high in 2025. The total gross leasing of 86.4 million square feet not only surpasses the previous peak set in 2024 but also indicates a robust recovery from the pandemic’s impact. The 20% year-on-year growth showcases the resilience of the market and the increasing demand for office spaces. This growth is particularly notable as it exceeds pre-pandemic levels by 43%, signaling a strong rebound in business activities across the country.
Bengaluru has solidified its position as the largest office market, achieving a record leasing volume of 28 million square feet. Other major cities also demonstrated impressive growth, with Hyderabad leasing 11.4 million square feet, the National Capital Region (NCR) at 11.3 million square feet, Pune at 10.8 million square feet, and Chennai at 10.1 million square feet. Mumbai, while slightly trailing, recorded 9.8 million square feet in leasing. This widespread growth across various cities underscores the increasing demand for office spaces in India.
Global Capability Centres Drive Demand
A significant driver of this leasing surge has been the rise of Global Capability Centres (GCCs), which accounted for 38% of the total office absorption in 2025. Bengaluru emerged as the primary hub for GCC-related leasing, capturing nearly half of this demand. This trend highlights the city’s growing importance in the fields of research, technology, and global operations. The presence of GCCs not only boosts local economies but also enhances the overall attractiveness of India as a destination for international businesses.
In addition to GCCs, flexible workspace operators and third-party IT services have also reported their highest-ever annual leasing volumes. This reflects a renewed confidence among technology-led occupiers, who are increasingly seeking modern and adaptable office environments. The demand for flexible workspaces has surged as companies adapt to changing work patterns and prioritize employee well-being.
Supply Constraints and Rental Growth
Despite the robust demand for office spaces, the supply of new office buildings has not kept pace with leasing activity. In 2025, office completions rose by only 9% year-on-year, totaling 54.8 million square feet. Bengaluru and Pune were the primary contributors to this new supply, but the overall growth remains insufficient to meet the soaring demand. This supply-demand imbalance has resulted in significant rental growth across major markets.
The report indicates that NCR and Hyderabad experienced an annual rental appreciation of 10%, while Mumbai and Bengaluru saw increases of 6% each. The rising rents reflect the competitive nature of the market and the increasing preference for Grade A office spaces. Companies are prioritizing modern infrastructure, sustainability, and long-term operational efficiency, with Grade A spaces accounting for over 90% of total leasing during the year.
Future Outlook for the Indian Office Market
Looking ahead, the Indian office market is expected to maintain its strong performance into 2026. The momentum in demand, coupled with limited near-term supply additions, positions India as one of the leading office markets globally. Despite ongoing geopolitical and economic uncertainties, the outlook remains positive. The sustained interest in office spaces, particularly in major cities, suggests that businesses continue to view India as a viable and attractive location for their operations.
As companies adapt to evolving work environments and prioritize modern office solutions, the Indian office real estate market is poised for continued growth. The combination of strong demand, limited supply, and a focus on quality spaces will likely shape the future of this sector in the coming years.
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