- India’s office sector continues to build momentum with ~42 million square feet leased in H1 2025
India's office real estate market continues to demonstrate robust growth. According to Cushman & Wakefield's Q2 India Office Market Report, gross leasing volume (GLV) in the top 8 cities reached 21.4 million square feet (MSF) in Q2, reflecting a 5% quarter-on-quarter growth while no significant change year-on-year. With H1 2025 gross leasing now at ~42 msf, the sector is firmly on track to surpass 90 million square feet of annual leasing activity - a new benchmark and a reaffirmation of sustained occupier confidence.
This momentum follows 2024’s historic performance of ~89 million square feet, with H1 2024 figures comparable to this year’s. If trends hold, 2025 will mark the second consecutive year of 85+ million square feet of gross leasing, reinforcing a new baseline of market performance.
The strong leasing numbers reflect the depth of demand from global and domestic occupiers, with Global Capability Centres (GCCs), IT-BPM firms, flex operators, BFSI, and engineering & manufacturing companies driving growth.
Gross leasing volume, which factors in all leasing activity in the market, including fresh take-up, open market renewals by corporates as well as pre-leasing, is an indication of overall market activity.
In terms of cities, Bengaluru (5.0 MSF), Delhi NCR (4.6 msf) and Mumbai (3.9 msf) collectively contributed around 63% of the quarterly leasing volume. The other cities followed with Pune (3.3 msf), Chennai (2.2 msf), Hyderabad (1.7 msf), Kolkata (0.5 msf) and Ahmedabad (0.2 msf).
Net absorption, a key indicator of real estate demand in terms of expansion of occupied space in the market, stood at 13.5 MSF in Q2, marking a 19% year-on-year growth, and totalled 27.8 msf for H1 2025. Delhi NCR (5.2 MSF), Pune (4.3 MSF), and Chennai (3.1 MSF) posted their highest ever half yearly net absorption, reflecting long-term occupier confidence in the Indian office market.
Fresh leases accounted for 77% of total leasing activity in H1 2025, a trend that has consistently remained above the 70% mark since late 2022. Notably, pre-commitments rose to 10%, suggesting a supply crunch in core markets and heightened occupier urgency.
Global Capability Centres continued to be a major demand driver, contributing 24% of the overall leasing activity in the quarter at 5.1 MSF. Bengaluru (1.6 MSF) and Pune (1.6 MSF) accounted for 63% of this leasing.
H1-25 marked a historic high for GCC leasing in the first half of any year, with 11.4 msf transacted, up 3% year-on-year. IT-BPM held the largest share at 40%, followed by E&M GCCs with a share of 36%.
Sectoral Trends
In terms of sectoral demand, the IT-BPM sector retained its position as the largest occupier, accounting for 34% share of GLV in Q2, translating to over 7msf - the sector’s second-highest quarterly volume since the pandemic. This was followed by the flex workspace operators with an 18% share, showing a notable 50% q-o-q growth.
On a half-yearly basis, IT-BPM accounted for 32% of H1-25 leasing, followed by BFSI and flex segments with 16% share each. Engineering and Manufacturing contributed to 13% of the demand in H1-25.
Supply, Vacancy and Rentals
The office market across the top 8 cities saw an influx of 12.5 million sq ft of new completions in Q2, a strong 53% increase y-o-y and a 17% q-o-q growth.
On a half-yearly basis, the new supply touched 23.2 msf, marking a 14% y-o-y growth. Over 60% of this H1 supply was concentrated in Bengaluru and Pune, with Pune emerging as the frontrunner. The city delivered 4.8 msf in Q2 alone, accounting for 38% of the quarterly supply. Pune’s H1 supply touched 8.0 msf, marking its highest ever supply in any half-year.
Since the new supply of 23.3 MSF stood much lower than the net absorption of over 28 MSF, the gap in demand-supply has led to a sharp fall in vacancy rate to the tune of 230 basis points in H1 2025. Cities such as Bengaluru, Pune, Mumbai and Chennai are witnessing tight vacancy rates, potentially signaling an upward pressure on rents.
Rents saw upward pressure in core districts across all major cities, led by Hyderabad and Mumbai, which posted a 15–16% growth year-on-year.
Anshul Jain, Chief Executive, India, SEA & APAC Tenant Representation, Cushman & Wakefield said, “India’s office market continues to outperform global peers, underpinned by a solid economic outlook and long-term occupier confidence. Our forecast of more than 90 million square feet of gross leasing this year reflects the sector’s structural strength—particularly as we see sustained growth in sectors like technology, BFSI, and engineering.
The GCC segment continues to be a key driver of demand, contributing a record 27% of total leasing in H1. These centers are maturing in complexity and scale, and India’s deep talent pool and improving infrastructure continue to reinforce its positioning as a global hub. At the same time, we are seeing more diverse sources of demand from domestic corporates, financial institutions, and flex players. As we head into H2, we expect this momentum to continue—buoyed by easing inflation, expected rate cuts, and the continued evolution of India as a strategic business location.”
Veera Babu, Executive Managing Director, Tenant Representation, Cushman & Wakefield added, “The market has seen strong momentum and is well on track to reach 90 million square feet this year—setting a new milestone for Indian real estate. With 42 million square feet already leased in H1, and a robust pipeline of active deals, it’s clear that demand remains broad-based and resilient.
The growth is being fuelled by a convergence of trends—expansion of existing occupiers, rapid scaling of GCCs, and entry of new domestic and global firms. But supply is lagging in core locations, creating a landlord’s market. Occupiers looking for high-quality space need to act early, especially as pre-commitments are on the rise and rentals are climbing in prime markets.”
