India’s office market scales unprecedented highs with gross leasing activity at 83.3 mn sq ft in 2025, reiterating India’s position as a strategic business hub
Q4 2025 gross leasing is the highest ever compared to any previous quarters at 26.8 mn sq ft, a strong indicator of the robust demand momentum cutting across industry segments from both global and domestic occupiers.
Bengaluru dominated leasing activity during the quarter with a share of 34.8%, followed by Delhi NCR with 16.5% and Mumbai and Hyderabad with 15.6% and 15.5% shares, respectively.
On an overall basis, Flex was the leading occupier segment for the second quarter in a row with its share in Q4 leasing hitting the highest ever at 26.6%, followed by Tech 21.2%. For full year 2025, Tech remained the driver of leasing activity with a 25.8% share, followed by Flex with 21.5%. Manufacturing/Industrial and BFSI had similar shares of 15.4% and 15.2% in 2025’s leasing volumes. In absolute terms, Flex and Consulting segments had their best-ever year in terms of leasing.
Market activity has continued to create successive new peaks since 2023, a strong indicator of the unmatched growth momentum exhibited by India’s office market with 2025 creating yet new records with 83.3 mn sq ft of gross leasing volumes for the full year. With global firms accounting for a strong 58.4% share, India’s position as a strategic business hub that offers genuine structural tailwinds was reiterated in a period marked by global uncertainties.
GCCs remained the mainstay of office leasing with a 37.7% share of gross leasing in 2025, having leased over 31 mn sq ft in 2025, the highest across any previous years. The momentum is driven by BFSI and Manufacturing segments within the GCC universe even as Tech remains a key contributor as well.
Domestic occupier activity was driven by indigenous flex firms which leased ~18 mn sq ft in 2025 which was their best performance across years.
Cities of Bengaluru, Hyderabad, Pune and Mumbai recorded their best ever year in gross leasing terms, showcasing a broad-based and secular demand spectrum across a multitude of industry segments. Gross leasing in the other cities was also higher y-o-y or at near-similar levels compared to the previous year. This strongly indicates the dispersion of demand as occupier strategies evolve in a dynamic environment.
India’s net absorption in Q4 2025 rose to its highest in the year at 17.1 mn sq ft, driven by a strong performance with all South cities similarly recording their highest quarterly numbers for 2025 in this quarter.
India’s net absorption for 2025 rose to a record high of 57.0 mn sq ft, surpassing the previous year by 14.2% y-o-y. This was driven by strong pre-commitments in new completions and new space take-up pointing to business and headcount expansion. In Q4 2025, net absorption was driven by Bengaluru accounting for a sizeable 37.2% share, followed by Hyderabad with 15.7% and Delhi NCR with 14.0% shares, respectively.
Net absorption in 2025 was at a record-breaking 57.0 mn sq ft. It is a strong indicator of India’s focal role in robust expansion-driven footprint growth and accretive job creation driven by its unmatched talent, innovation ecosystem and market potential. Bengaluru, Delhi NCR and Pune recorded their best-ever annual net absorption figures with net absorption also higher y-o-y for Chennai and Hyderabad. Delhi NCR recorded the strongest y-o-y growth of 30% in net absorption terms in 2025. Bengaluru and Delhi NCR led the full year net absorption contribution with shares of 29.7% and 21.6%, respectively.
With the headcount and footprint growth-oriented demand resulting in the strongest net absorption historically for Pan-India, vacancy has now declined to 15.2%, lowest in five years. On a q-o-q basis, vacancy declined across all cities. In fact, Bengaluru’s vacancy is now at a four-year low while it is at a historic low in Mumbai and Delhi NCR in the past fifteen years.
The new office completions were recorded at 13.83 mn sq ft during the quarter, representing a 2.3% q-o-q rise. Total net supply, post inclusion of a few refurbished projects in Bengaluru, Chennai and Hyderabad, increased to 15.94 mn sq ft, marking a 47.5% growth from the previous quarter. Bengaluru, Hyderabad and Pune led the new completions activity during the quarter for a combined share of 64.3%.
Average rents in Q4 2025 across all cities rose between 0.2-2.6% on a q-o-q basis, with Hyderabad recording the maximum rental growth of 2.6%, followed by Delhi NCR with 2.3%, Bengaluru and Mumbai with 1.4% and 1.1% respectively, followed by the rest.
India has successfully bucked global headwinds and the volatile business environment to emerge as a stronger office market displaying growth across both headcount and real estate footprint metrics. With robust office occupancies already causing a space crunch in existing portfolios of large occupiers, there are clear signals of portfolio expansion actions moving ahead. This combined with the strong pipeline of deal activity and current performance point towards India’s leasing volumes to potentially hit the 100 mn sq ft mark over the next two years.
Demand from GCCs – both existing ones and new country entrants remains strong, with nearly 200 new GCCs making their way into the country over the past two years. With GCCs making up ~50% of all active space requirements driven by international banking and financial services players' appetite for offshore operational centres, complemented by the manufacturing sector dynamism fostered through strategic policy initiatives and strong tech R&D background, the growth runway remains intact.