India’s office market has reached unprecedented heights, culminating in a historic year for real estate demand. 2025 marked a turning point, with net absorption across the top eight cities soaring to 61.4 million square feet (MSF), a remarkable 25% increase year-on-year. This surge signifies robust economic growth and a continued preference for physical workspaces, despite the rise of hybrid work models. The data, revealed in Cushman & Wakefield’s Office Q4 MarketBeat report, paints a vibrant picture of a sector primed for continued expansion.
Record-Breaking Net Absorption in India’s Office Sector
The 61.4 MSF net absorption figure isn’t just a number; it’s a testament to the resilience and adaptability of the Indian office landscape. Net absorption, a crucial metric in real estate, reflects the actual increase in occupied office space, factoring in move-outs as well as move-ins. This substantial growth demonstrates that businesses are actively expanding their footprints and investing in their physical presence.
This positive trend was largely propelled by two key markets: Bengaluru and Delhi NCR. Bengaluru took the lead with an impressive 14.4 MSF absorbed, while Delhi NCR followed closely with 10.9 MSF. Combined, these two cities accounted for a significant 41% of the total national absorption, highlighting their continued dominance as business hubs.
Fastest Growing Markets: Chennai and Delhi NCR
While Bengaluru and Delhi NCR led in overall volume, Chennai and Delhi NCR experienced the most dramatic growth. Chennai witnessed a staggering 187% year-on-year increase in net absorption, while Delhi NCR recorded an 82% jump. This acceleration in Chennai, in particular, signals the emergence of new corridors of opportunity and a broadening of demand beyond the traditional prime locations. Other cities contributing to the overall growth included Mumbai (9.6 MSF), Hyderabad (9.1 MSF), Pune (8.2 MSF), Kolkata (1.4 MSF), and Ahmedabad (0.8 MSF).
Veera Babu, Executive Managing Director, Tenant Representation at Cushman & Wakefield, noted that “Bengaluru, Delhi NCR and Mumbai collectively accounted for more than half of net absorption, while the acceleration in Chennai signals the rise of new corridors of opportunity. As these strategies evolve and demand spreads into emerging micro-markets, India’s office sector will continue to adapt and deliver spaces that empower a dynamic, future-ready workforce.”
Gross Leasing Volume and the Demand for Premium Space
Alongside the record-breaking net absorption, the Gross Leasing Volume (GLV) for the year reached approximately 89 MSF, matching the previous year’s peak. Importantly, this demand was overwhelmingly driven by fresh leasing, accounting for nearly 80% of the total annual GLV. This indicates a strong preference among businesses for new, high-quality office spaces, rather than renewals or relocations.
This trend towards premium office spaces is a clear signal that companies are prioritizing employee experience and creating environments conducive to collaboration and innovation. The desire for modern amenities, flexible layouts, and prime locations is fueling the demand for Grade A office buildings. This focus on quality is a key characteristic of the current commercial real estate landscape.
Sectoral Drivers: IT-BPM and Global Capability Centres
The IT-BPM (Information Technology – Business Process Management) sector continued to be the dominant force in driving office space demand, contributing 31% of total leasing. However, the most significant growth story within the sector was the expansion of Global Capability Centres (GCCs).
GCCs, essentially in-house centers for research, development, and other specialized functions, leased a record 29.3 MSF in 2025, representing 33% of the annual volume. This surge in GCC activity demonstrates India’s growing importance as a global hub for innovation and skilled talent. The availability of a large, qualified workforce and a supportive business environment are key factors attracting multinational corporations to establish and expand their GCC operations in India. This growth in office space demand is a positive indicator for the Indian economy.
Supply, Vacancy, and Rental Growth
Despite the substantial increase in demand, the market also witnessed a record addition to office supply, crossing the 50 MSF threshold for the first time and reaching 53 MSF. This increased supply, however, was quickly absorbed, leading to a significant compression in vacancy levels, which dropped by 210 basis points year-on-year.
The strong demand and limited vacancy rates inevitably led to rental growth across all eight major cities. Hyderabad and Mumbai experienced the most substantial increases, with rents rising between 12% and 14%. This upward pressure on rents is expected to continue as demand outpaces supply in key markets. Understanding these real estate trends is crucial for both occupiers and investors.
Looking Ahead: Continued Growth and Opportunity
Anshul Jain, Chief Executive – India, SEA, MEA & APAC Office and Retail at Cushman & Wakefield, confidently stated, “Occupier confidence, deep structural demand, and continued infrastructure development will keep India at the forefront of global enterprise decision-making. With GCC expansion accounting for nearly one-third of total leasing, alongside rising technology adoption, a diversified occupier base and a vast talent pool, India is well positioned to maintain its leadership in the global office market through 2026 and beyond.”
The Indian office sector’s performance in 2025 is a clear indication of its long-term potential. With a robust economy, a growing talent pool, and continued investment in infrastructure, India is poised to remain a leading destination for businesses seeking to expand their operations. The future looks bright for the Indian office market, and stakeholders can expect continued growth and opportunity in the years to come.
To stay informed about the latest developments in the Indian commercial real estate market, explore Cushman & Wakefield’s comprehensive reports and analyses. Consider how these trends might impact your business strategy and investment decisions.
