India’s Office Market Records Historic Net Absorption of 61 MSF in 2025, Up 25 per cent YoY: Cushman & Wakefield

Gurugram, January 5, 2026: India’s office sector closed 2025 with its strongest performance on record, registering net absorption of 61.4 million square feet (msf) across the top eight cities, according to Cushman & Wakefield’s Office Q4 MarketBeat report. This marks a robust 25 per cent year-on-year (YoY) increase, reflecting strong occupier confidence and the market’s ability to deliver scale and resilience amid evolving business needs. Net absorption is a key indicator of real estate demand, representing the net change in occupied office space.

At the city level, Bengaluru (14.4 msf) and Delhi (10.9 msf) dominated, contributing 23 per cent and 18 per cent to total net absorption, respectively, driven by increased activity across core business districts. They were followed by Mumbai (9.6 msf), Hyderabad (9.1 msf), Pune (8.2 msf), Chennai (7.0 msf), Kolkata (1.4 msf) and Ahmedabad (0.8 msf). Notably, Chennai and Delhi NCR recorded the sharpest YoY growth at 187 per cent and 82 per cent, respectively, underscoring strengthening market fundamentals and an increasing capacity to attract and absorb expanding office demand.

Leasing Activity and Sectoral Trends

The record net absorption was supported by robust leasing activity and healthy supply additions, catering to growing demand across markets. Gross Leasing Volume (GLV) stood at ~89 msf, matching last year’s record high and signaling sustained, long-term confidence in India’s office market growth trajectory. This performance marks four consecutive years of consistent growth and the second consecutive year of record leasing, reinforcing India’s position as the office of the world. GLV, factors in all leasing activity in the market, including fresh take-up, open market renewals by occupiers as well as pre-leasing, and is an indication of overall market activity.

Fresh leasing remained the primary demand driver, accounting for nearly 80 per cent of annual GLV, underscoring occupiers’ commitment to scaling operations and sustained preference for premium office spaces. Bengaluru (~22 msf), Mumbai (~17 msf) and Delhi NCR (~16 msf) continued to anchor leasing activity, together accounting for a dominant 62 per cent share of annual GLV. They were followed by Hyderabad (12.4 msf), Pune (9.9 msf), Chennai (9.0 msf), Kolkata (1.7 msf) and Ahmedabad (0.9 msf). Meanwhile, Delhi NCR and Chennai posted healthy YoY growth of 25 per cent and 23 per cent, respectively.

Global Capability Centres (GCCs) recorded a new leasing high of 29.3 msf, accounting for 33 per cent of total GLV, reflecting India’s role as a core hub in global enterprise location strategies.

From a sectoral perspective, IT-BPM retained its dominance, accounting for 31 per cent of total leasing and registering its highest-ever annual leasing volume. Flexible workspace operators emerged as the second-largest demand driver with 15.3 per cent share, a 9 per cent YoY growth, while BFSI and Engineering & Manufacturing sectors remained key contributors with 15.1 per cent and 14.3 per cent share, respectively. This increasingly diversified demand base points to the resilience and depth of India’s office market.

Supply, Vacancy and Rental Growth

Supply additions touched a record ~53 msf, marking a 17 per cent YoY increase, with Bengaluru and Pune together accounting for 49 per cent of annual completions. After several years of subdued supply, new completions crossed the 50 msf threshold for the first time, providing relief to occupiers and easing pressure in tight markets.

Despite record supply, strong demand led to significant vacancy compression, with overall vacancy declining by 210 basis points (bps) YoY, the steepest annual drop on record. All major cities reported a reduction in vacancy levels, except Pune and Ahmedabad. Pre-commitments also gained traction, particularly in prime markets with tightening vacancies, as occupiers sought to secure quality space ahead of project completion.

Rental growth was observed across all the top eight cities, led by Hyderabad and Mumbai (12–14 per cent YoY), while Ahmedabad, Delhi NCR, and Chennai posted gains in the 6–9 per cent range.

Anshul Jain, Chief Executive – India, SEA, MEA & APAC Office and Retail, Cushman & Wakefield said, “This year’s performance reflects more than record numbers, it signals a long-term growth trajectory anchored in strong fundamentals. 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.”

Veera Babu, Executive Managing Director, Tenant Representation, Cushman & Wakefield added, “2025 has been a turning point for India’s office market in how demand is shaping the future of work. 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. Fresh leasing accounting for nearly 80 per cent of activity underscores the sustained appetite for quality office spaces, as IT-BPM, GCCs, and flex operators redefine workplace strategies and create a more agile, collaborative ecosystem. 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.”