India's Office Market Posts 40% Growth in H1 2025: Anarock Report, ET RealEstate
India's commercial real estate market saw a strong recovery in the first half of 2025. Office leasing in top cities increased significantly. Bengaluru led in absorption, while Pune showed the highest growth. Kolkata was the only city with a decline. New office completions also rose. Vacancy rates slightly decreased, but Hyderabad had the highest rate.
NEW DELHI: India's commercial real estate sector witnessed a robust rebound in the first half of 2025, with net office leasing across the top seven cities surging by 40% year-on-year to approximately 26.8 million sq ft, according to Anarock Research. The previous year’s comparable figure stood at 19.08 million sq ft.
Bengaluru emerged as the top-performing city, clocking 6.55 million sq ft of net absorption, up 64% from 4 million sq ft in H1 2024. Pune recorded the steepest year-on-year growth in leasing volumes — a 188% jump to 3.8 million sq ft, up from 1.32 million sq ft a year earlier.
In contrast, Kolkata was the only market to post a decline, with net office leasing falling 51% to 0.45 million sq ft.
New office completions across these key markets also saw healthy growth, rising 25% year-on-year to nearly 24.51 million sq ft from 19.65 million sq ft in H1 2024. Bengaluru again led with 6.91 million sq ft of new supply, followed by Hyderabad at 4.7 million sq. ft. Notably, Pune saw a staggering 533% increase in new supply—from 0.9 million sq ft to 5.7 million sq ft.
Despite the supply uptick, average office vacancy rates declined slightly to 16.3%, from 16.7% a year ago. However, Hyderabad remained the city with the highest vacancy rate, inching up to 26.6%.
“The office real estate market was clearly ahead of its residential counterpart in H1 2025,” said Peush Jain, managing director (Commercial Leasing & Advisory) of the company said. “Both net absorption and new completions registered high growth, underscoring India’s macroeconomic strength and strong occupier interest.”
Average office rentals inched up 5% to ₹88 per sq ft per month, with Chennai leading the rental growth at 6%, followed by Bengaluru and NCR, which recorded 5% increases each.
IT/ITeS firms remained the dominant occupiers, contributing 29% of total leasing, followed by co-working operators (22%) and the BFSI sector (18%). The consulting and e-commerce sectors also saw marginal upticks in demand share.
According to Jain, the steady inflow of leasing from global capability centers (GCCs) and U.S.-based corporations, coupled with India's sustained economic momentum, continues to reinforce the office market's resilience.
