India Office Leases Hit Record 86.4 Million Sq Ft in 2025
Overview
India's office real estate market achieved an all-time high of 86.4 million square feet leased in 2025, a 20% jump year-on-year. Knight Frank reports sustained occupier confidence, with Bengaluru leading at 28 million sq ft. Global Capability Centres drove demand, while rental appreciation occurred despite supply constraints. The market shows strong global prospects.
India's office property market concluded 2025 with a landmark achievement, recording an unprecedented 86.4 million square feet in gross leasing. This figure, detailed in Knight Frank India's latest report, represents a significant 20% surge from the previous year and a robust 43% leap compared to pre-pandemic levels in 2019. The sustained demand signals strong occupier confidence and solidifies India's position as a key global business hub.
Market Dominance by Bengaluru
Bengaluru once again proved its mettle, cementing its status as the nation's premier office market. The city grossed an all-time high of 28 million square feet in leasing activity alone. Other major metropolitan areas also posted impressive numbers, with Hyderabad, the National Capital Region (NCR), Pune, and Chennai each surpassing the 10 million square feet threshold. Mumbai narrowly missed this mark, recording 9.8 million square feet.
GCCs Fueling Absorption
Global Capability Centres (GCCs) emerged as the primary engine of demand, accounting for a substantial 38% of the total office space absorption throughout 2025. Bengaluru was the epicenter of this trend, capturing almost half of all GCC-related leasing and reinforcing its role as India's leading center for research, technology, and global operations. Flexible workspace providers and third-party IT services firms also registered their highest-ever annual leasing volumes, reflecting renewed investor and occupier optimism, particularly within the technology sector.
Supply-Demand Dynamics and Rentals
Despite the surge in leasing, new office space completions saw a more modest increase of 9% year-on-year, reaching 54.8 million square feet. Bengaluru and Pune were the primary contributors to this new supply. This imbalance between robust demand and comparatively slower supply growth translated into firm rental appreciation across major markets. The NCR and Hyderabad experienced a 10% year-on-year rental increase, while Mumbai and Bengaluru saw rentals climb by 6% each.
Grade A Preference Persists
Companies continued to favor modern, sustainable, and efficient workspaces, with Grade A office space dominating occupier preferences. This category accounted for over 90% of total leasing for the year. As demand momentum is projected to continue into 2026 and with limited new supply expected in the short term, the Indian office market appears well-positioned for sustained strength, even amidst global economic uncertainties.
