_India’s Office Market at an Inflection Point

2025 will be remembered as a landmark year for India’s office market. At over 86 million sq ft of leasing, the country has not only set a new all-time high but also positioned itself as the best-performing office market globally. This represents a near 20% growth over 2024 and an extraordinary 43-44% expansion over pre-pandemic levels, underscoring a structural shift in how global enterprises view India – not just as a cost advantage, but as a strategic business destination. Notably, stock in the Indian office market also crossed the 1 bn sq ft milestone in 2025.

A perfect macroeconomic backdrop

What makes this performance even more compelling is the broader economic context. India currently finds itself in a rare goldilocks phase – high growth with low inflation. GDP growth hovering around 7.3%, easing interest rates, and strong RBI outlooks have created an environment that is extremely conducive for long-term corporate decision-making. Occupiers today are committing to space with a level of confidence we haven’t seen in decades.

The rise of multi-engine demand

The demand story in 2025 has been driven by three powerful engines:

1. Global Capability Centres (GCCs) – Accounting for nearly 38% of total leasing, GCCs continue to anchor India’s office market. Their expanding mandates, from R&D and engineering to analytics and global operations, reflect India’s growing role in enterprise ecosystems rather than mere backend support.
2. Third-party IT services – With AI adoption accelerating globally, India’s deep tech talent pool has once again become indispensable, resulting in a 94% YoY growth in leasing by this segment.
3. Flexible and managed offices – Flex operators recorded their highest-ever transaction volumes and constituted 22% of the market, as occupiers increasingly seek agility, speed-to-market and scalable workplace solutions.

Together, these segments have made India’s office market far more diversified, resilient, and future-ready than ever before.

Bengaluru leads, but the story is pan-India

While Bengaluru’s record 28.7 mn sq ft cements its position as the country’s office space capital, five cities have crossed the 10 mn sq ft mark during the year - Bengaluru, Hyderabad, NCR, Pune and Chennai. This geographically distributed growth signals not just expansion by existing occupiers, but fresh market entry by global and domestic firms alike.

The office market is deep, distributed and structurally strong, not dependent on a single city or sector. The real story lies in the geographically diversified growth across multiple Indian office markets. While Bengaluru’s record 28.7 mn sq ft cements its position as the country’s office space capital, Hyderabad, NCR, Pune, Chennai all cross major milestones together.

The supply paradox and rental reset

Interestingly, this demand surge has outpaced new supply. Completions grew by just 9% YoY, leading to tightening vacancies and rising rent levels. Rents have firmed up across all major markets, with NCR and Hyderabad recording double-digit growth during the year.

Another telling trend is the sharp rise in pre-commitments. Corporates are increasingly locking in future capacity well in advance, despite global geopolitical and economic uncertainties. Approximately 42% of Bengaluru’s total transaction volumes was accounted for pre-commitments during the year. This behaviour reflects a long-term conviction in India’s growth trajectory and talent ecosystem.

What 2026 holds

Looking ahead, the fundamentals remain firmly in place. GCC expansion, technology-led demand and institutional investments – particularly through potential new REIT listings will continue to drive momentum. The only meaningful constraint is supply, which may require innovative solutions such as retrofitting, redevelopment and faster project execution.

In many ways, 2025 was not just a record year, it was a turning point. India has moved decisively from being an “emerging office market” to becoming a core pillar of global corporate real estate strategies. If 2025 was about scale, 2026 will be about consolidation, quality, and long-term transformation.

And that is, in my opinion, perhaps the most powerful takeaway – India’s office market is no longer chasing global benchmarks. It is setting them.