Net office leasing up 40% Y-o-Y in top 7 cities in H1 2025, new supply up 25%

While the Indian residential market stabilizes amid declining sales and new supply, the commercial office real estate is on a roll across the top 7 cities. Latest ANAROCK Research data reveals a 40 percent yearly rise in net office absorption – from approx. 19.08 Mn sq. ft. in H1 2024 against approx. 26.8 Mn sq. ft. in H1 2025.

As expected, Bengaluru led with approx. 6.55 Mn sq. ft. office space leased in the first half of this year, against approx. 4 Mn sq. ft. at the end of H1 2024 - a 64 percent yearly increase.

• In terms of annual net absorption growth, Pune recorded the highest with 188 percent - from approx. 1.32 Mn sq. ft. in H1 2024 to approx. 3.8 Mn sq. ft. in H1 2025
• Kolkata was the only city to see a drop (of 51 percent) in net office absorption – from approx. 0.93 Mn sq. ft. in H1 2024 to approx. 0.45 Mn sq. ft. in H1 2025

Office Supply

In terms of new office completions, the top 7 cities recorded a 25 percent increase in the period – from approx. 19.65 Mn sq. ft. in H1 2024 to approx. 24.51 Mn sq. ft. in H1 2025. Again, Bengaluru superseded all other top cities with a total new office supply of approx. 6.91 Mn sq. ft. added in first half of 2025, against 5.5 Mn sq. ft. in H1 2024 - a 26 percent yearly growth.

• MMR and Hyderabad were the only cities to see a drop in new supply addition in H1 2025 - by 45 percent and 17 percent, respectively. MMR added approx. 1.9 Mn sq. ft. office space in H1 2025 as against approx. 3.47 Mn sq. ft. in H1 2024. Hyderabad saw approx. 4.7 Mn sq. ft. of new supply in H1 2025, against 5.68 Mn sq. ft. in H1 2024.
• Interestingly, Pune recorded the highest yearly jump in new office supply - a massive 533 percent – from just 0.9 Mn sq. ft. in H1 2024 to over 5.7 Mn sq. ft. in H1 2025

 “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. Also, overall office leasing by GCCs across cities continues to grow in 2025, and large US-based corporates continue to lease large spaces across Indian cities.”

“The positive influence of the Indian economy's continued highest GDP growth predictions globally on the office market cannot be overstated," says Jain. "Amid the ongoing policy chaos in the US, India is seen as a haven of continuing and dependable long-term stability and growth.”

Sector-wise, IT/ITeS continued to dominate office space demand in H1 2025 with a 29 percent overall leasing share, followed by the coworking sector with a 22 percent share and BFSI with 18 percent. "Interestingly, H1 2025 saw demand from these three sectors and also consultancy businesses and e-commerce rise by 1 percent each against H1 2024. On the other hand, manufacturing & industrial and other sectors’ demand share decreased", adds Jain.

Office Vacancies

Office space vacancies across the top 7 cities collectively dropped to 16.30 percent in H1 2025 - a marginal improvement over the 16.70 percent in H1 2024. Despite reduced new office supply in MMR and Hyderabad in the first half, office vacancies increased in both cities – from 13 percent in H1 2024 to 15.10 percent in H1 2025 in MMR, and from 25.50 percent to 26.60 percent in Hyderabad. Currently, Hyderabad has the highest vacancy rates among the top 7 cities.

Office Rentals

Average monthly office rentals increased by a marginal 5 percent - from Rs. 84/sq. ft. in H1 2024 to Rs. 88/sq. ft. in H1 2025. Chennai recorded the highest 6 percent yearly rise in monthly office rentals – from Rs. 72/sq. ft. in H1 2024 to Rs. 76/sq. ft. in H1 2025. Both Bengaluru and NCR recorded 5 percent yearly increases.