Net Office Leasing Rises 40% YoY in Top 7 Cities in H1 2025, New Supply Up 25%

Mumbai, July 3, 2025: The commercial office real estate is on a roll across the top seven cities. Latest ANAROCK Research data shows a 40 per cent yearly rise in net office absorption from around 19.08 mn sq ft (MSF) in H1 2024 against approximately 26.8 MSF in H1 2025.
 
As expected, Bengaluru led with around 6.55 MSF of office space leased in the first half of this year against about 4 MSF at the end of H1 2024, a 64 per cent yearly increase.
 
In terms of annual net absorption growth, Pune recorded the highest with 188 per cent from around 1.32 MSF in H1 2024 to about 3.8 MSF in H1 2025

Kolkata was the only city to see a drop (of 51 per cent) in net office absorption from approximately 0.93 MSF in H1 2024 to about 0.45 MSF in H1 2025

Source: ANAROCK Research & Advisory

Office Supply

In terms of new office completions, the top seven cities recorded a 25 per cent increase in the period from approximately 19.65 MSF in H1 2024 to about 24.51 MSF in H1 2025. Again, Bengaluru superseded all other top cities with a total new office supply of around 6.91 MSF added in the first half of 2025 against 5.5 MSF in H1 2024—a 26 per cent yearly growth.

MMR and Hyderabad were the only cities to see a drop in new supply addition in H1 2025 by 45 per cent and 17 per cent, respectively. MMR added around 1.9 MSF of office space in H1 2025 as against about 3.47 MSF in H1 2024. Hyderabad saw 4.7 MSF of new supply in H1 2025 against 5.68 MSF in H1 2024.

Interestingly, Pune recorded the highest yearly jump in new office supply—a massive 533 per cent—from just 0.9 MSF in H1 2024 to over 5.7 MSF in H1 2025

Source: ANAROCK Research & Advisory

“The office real estate market was ahead of its residential counterpart in H1 2025,” says Peush Jain, MD (Commercial Leasing and Advisory), ANAROCK Group. “Both net absorption and new office completions saw high growth largely because of India’s enduring economic strength. Also, overall office leasing by GCCs across cities continues to grow in 2025, and large US-based corporates continue to lease large spaces across Indian cities.”
 
He added, “The positive influence of the Indian economy’s continued highest GDP growth predictions globally on the office market cannot be overstated. Amid the ongoing policy chaos in the US, India is seen as a haven of continuing and dependable long-term stability and growth.”
 
Sector-wise, IT/ITeS continued to dominate office space demand in H1 2025 with a 29 per cent overall leasing share, followed by the coworking sector with a 22 per cent share and BFSI with 18 per cent.

“Interestingly, H1 2025 saw demand from these three sectors and also consultancy businesses and e-commerce rise by one per cent each against H1 2024. On the other hand, manufacturing and industrial and other sectors’ demand share decreased”, said Jain.

Office Vacancies

Office space vacancies across the top seven cities collectively dropped to 16.30 per cent in H1 2025—a marginal improvement over the 16.70 per cent in H1 2024. Despite reduced new office supply in MMR and Hyderabad in the first half, office vacancies increased in both cities—from 13 per cent in H1 2024 to 15.10 per cent in H1 2025 in MMR, and from 25.50 per cent to 26.60 per cent in Hyderabad. Currently, Hyderabad has the highest vacancy rates among the top seven cities.

Office Rental

Average monthly office rentals increased by a marginal five per cent from INR 84/sq ft in H1 2024 to INR 88/sq ft in H1 2025. Chennai recorded the highest six per centyearly rise in monthly office rentals from INR 72/sq ft in H1 2024 to INR 76/sq ft in H1 2025. Both Bengaluru and NCR recorded five per cent yearly increase.