India's commercial real estate sector has shattered all previous records, posting its strongest annual performance ever in 2025. According to the latest 'India Real Estate - Office and Residential Market' report for the second half of 2025 by Knight Frank India, the country witnessed an unprecedented surge in office space leasing, cementing its status as a top global business destination.
Historic Leasing Volumes and Market Leaders
The total gross leasing of office space across India's top seven cities soared to an all-time high of 86.4 million square feet in 2025. This remarkable figure represents a substantial 20% year-on-year growth, surpassing the previous peak set just a year earlier in 2024. Compared to the pre-pandemic era of 2019, the market has expanded by a staggering 43%.
Bengaluru firmly retained its crown as the nation's premier office market, achieving a historic milestone of its own by grossing 28 million square feet in annual leasing. Several other major markets also crossed a significant threshold. Hyderabad (11.4 mn sq ft), the National Capital Region or NCR (11.3 mn sq ft), Pune (10.8 mn sq ft), and Chennai (10.1 mn sq ft) all breached the 10 million square feet benchmark. Mumbai came very close, with leasing activity reaching 9.8 million square feet.
GCCs and Tech Sector Fuel Unprecedented Demand
The driving force behind this record-breaking year was the relentless expansion of Global Capability Centres (GCCs). These offshore units of multinational corporations accounted for a dominant 38% of the total office space absorption across India. Bengaluru solidified its position as the undisputed GCC capital, capturing nearly half of all leasing activity tied to these global operations hubs.
Beyond GCCs, other segments also posted their best-ever performances. Flexible workspace operators and companies providing third-party IT services signed leases for record volumes of office space. This trend highlights renewed and robust confidence among technology-led occupiers who are betting on India's long-term growth story.
Supply-Demand Imbalance and Rental Growth
Despite the soaring demand, the supply of new Grade A office buildings could not keep pace. Completions of new office spaces increased by a modest 9% year-on-year to 54.8 million square feet in 2025. Bengaluru and Pune were responsible for the majority of these new additions. This significant gap between what was leased and what was delivered led to firm rental appreciation across all major cities.
The Knight Frank report noted that NCR and Hyderabad witnessed the sharpest annual rental growth at 10% each. This was followed by Mumbai and Bengaluru, where rents appreciated by 6% annually. The preference for high-quality infrastructure was clear, with Grade A office spaces commanding over 90% of the total leasing activity, as companies prioritize modern, sustainable, and efficient workplaces.
Outlook: Sustained Momentum Ahead
The momentum is expected to continue into 2026. With demand drivers like GCCs and the technology sector remaining strong, and a pipeline of new supply that remains limited in the near term, the Indian office market is poised to maintain its position as one of the world's strongest commercial real estate performers. This resilience comes even amid ongoing global geopolitical and economic uncertainties, underscoring the fundamental strength of India's office sector.
