Bengaluru, Pune Lead Growth in Absorption and Supply as India’s Office Market Defies Global Slowdowns
India’s commercial office market continues its robust expansion, outpacing residential real estate in H1 2025. According to the latest ANAROCK Research, net office leasing across the top 7 cities jumped 40% year-on-year, while new supply rose 25%, underscoring sustained demand from IT/ITeS, coworking operators, and BFSI occupiers.
“The office real estate market was clearly ahead of its residential counterpart in H1 2025,” said Peush Jain, MD – Commercial Leasing & Advisory, ANAROCK Group. “Both net absorption and new completions saw high growth, largely because of India’s enduring economic strength.”
📊 Net Office Leasing Trends
Net office absorption across the top 7 cities rose to ~26.8 million sq. ft. in H1 2025, compared to ~19.08 million sq. ft. in H1 2024.
Bengaluru led with the highest net leasing, while Pune recorded the fastest growth.
| City | H1 2025 Net Absorption (Mn sq. ft.) | H1 2024 (Mn sq. ft.) | % Change |
|---|---|---|---|
| Bengaluru | 6.55 | 4.00 | +64% |
| MMR | 4.50 | 3.15 | +43% |
| NCR | 5.00 | 4.66 | +7% |
| Chennai | 2.30 | 1.90 | +21% |
| Hyderabad | 4.20 | 3.12 | +35% |
| Pune | 3.80 | 1.32 | +188% |
| Kolkata | 0.45 | 0.93 | -51% |
| Total | 26.80 | 19.08 | +40% |
💬 Expert Insight:
“Amid the ongoing policy chaos in the US, India is seen as a haven of continuing and dependable long-term stability and growth,” Jain added.
🏢 New Office Supply Expands
New office completions reached 24.51 million sq. ft., with Pune witnessing an astonishing 533% surge.
| City | H1 2025 New Supply (Mn sq. ft.) | H1 2024 (Mn sq. ft.) | % Change |
|---|---|---|---|
| Bengaluru | 6.91 | 5.50 | +26% |
| MMR | 1.90 | 3.47 | -45% |
| NCR | 3.70 | 2.75 | +35% |
| Chennai | 1.50 | 1.35 | +11% |
| Hyderabad | 4.70 | 5.68 | -17% |
| Pune | 5.70 | 0.90 | +533% |
| Kolkata | 0.10 | 0.00 | 100% |
| Total | 24.51 | 19.65 | +25% |
Pune and Bengaluru collectively accounted for nearly half of the new supply.
📈 Sector-wise Leasing Share
The IT/ITeS sector retained its dominance, while coworking and BFSI strengthened their presence.
🔹 IT/ITeS: 29%
🔹 Coworking: 22%
🔹 BFSI: 18%
Other sectors like consultancy and e-commerce also saw marginal increases in demand.
📉 Vacancy and Rentals
Despite high new supply, overall vacancy marginally declined to 16.3% from 16.7% in H1 2024.
However, MMR and Hyderabad saw vacancies rise due to subdued leasing in select micro-markets.
| Market | Vacancy H1 2024 | Vacancy H1 2025 |
|---|---|---|
| MMR | 13.0% | 15.1% |
| Hyderabad | 25.5% | 26.6% |
Average monthly rentals grew 5%, from INR 84/sq. ft. to INR 88/sq. ft., with Chennai recording the sharpest increase of 6%.
✨ Outlook
Robust demand from global capability centers (GCCs), tech firms, and flexible space operators is expected to drive leasing momentum into H2 2025.
💬 “Leasing by large US corporates continues strongly across Indian cities, reflecting confidence in India’s long-term office market fundamentals,” noted Jain.
✅ Key Takeaways:
- 40% YoY rise in net absorption.
- 25% YoY growth in new completions.
- IT/ITeS remains the largest occupier.
- Pune outperformed all cities in supply growth.
- Average rents grew by 5%.
Also Read: India Commands APAC Office Leasing in 2024, Captures Record 47% Share
