The commercial real estate market in India has witnessed an unprecedented boom in the first half of 2025, with net office space absorption in the country's top eight cities surging by a remarkable 25%. According to a recent report by real estate consultancy CBRE, the net leasing of office spaces soared to a record 61.4 million square feet between January and June 2025. This stellar performance underscores the robust demand for Grade A office spaces, driven by sustained expansion from global capability centers and a resilient domestic economy.
Bengaluru Leads the Charge, Hyderabad and Delhi-NCR Follow
The growth was not uniform but led decisively by the country's technology hub. Bengaluru emerged as the frontrunner, accounting for a massive 29% share of the total net absorption. The city saw leasing activity reach approximately 17.8 million square feet, solidifying its position as India's premier office market. Following Bengaluru, the cities of Hyderabad and the Delhi-National Capital Region (NCR) were the other major contributors to this historic half-yearly figure.
The report highlights that this record-breaking absorption was significantly fueled by a few large-scale transactions. A handful of major deals, each exceeding 100,000 square feet, were responsible for nearly 50% of the total leasing volume across these top markets. This trend indicates strong confidence from large corporations and a strategic move towards consolidating and expanding their operational footprints in prime Indian locations.
Sectoral Drivers: GCCs and Flex Spaces in Focus
The demand dynamics reveal interesting insights into which sectors are powering this growth. The Global Capability Centre (GCC) segment continued to be the dominant force, contributing to over 35% of the total leasing activity. This is a testament to India's entrenched position as a global hub for back-office and technology operations for multinational corporations.
Close on its heels was the flexible space operators segment, which accounted for a significant 21% share. The sustained growth of co-working and managed office providers reflects the evolving workplace strategies of companies, emphasizing agility and hybrid work models. The technology sector and the BFSI (Banking, Financial Services, and Insurance) sector also remained strong contributors, showcasing diversified demand across industries.
Supply and Vacancy: A Balanced Market Outlook
On the supply side, the first half of 2025 saw the completion of new office projects totaling around 32.2 million square feet. Bengaluru again led in fresh completions, followed by Hyderabad and Chennai. Despite this substantial new supply entering the market, the overall vacancy rates across the top eight cities remained stable and healthy.
The vacancy rate saw only a marginal increase of 20 basis points, settling at 16.2% at the end of June 2025. This indicates that the new supply is being efficiently absorbed by the strong market demand, preventing any significant oversupply situation. The stability in vacancy rates, coupled with rising demand, points towards a landlord-favourable market in key micro-markets, with potential for rental growth.
The first half of 2025 has set a new benchmark for India's commercial office sector. The record leasing volume, led by Bengaluru and driven by GCCs and flex spaces, paints a picture of a resilient and expanding market. With stable vacancies and a strong pipeline of pre-commitments, the outlook for the full year remains decidedly optimistic, signaling continued strength in India's commercial real estate narrative.
