India's Office Market Hits Record High in 2025, Driven by GCC Boom

According to a report by Vestian, this 11% year-on-year growth was primarily propelled by Global Capability Centres (GCCs), which accounted for 45% of the total pan-India absorption. In absolute terms, GCC-led leasing reached 34.9 million sq ft, marking a 20% increase from the previous year.

"Strong demand from GCCs, supported by a favourable policy environment and restrictions on the H1-B visa, propelled pan-India office absorption to an all-time high of 78.2 Mn sq ft in 2025," the report stated.

The unprecedented demand triggered a corresponding surge in construction, with developers "accelerated construction activity across major markets" to meet the appetite for space. New completions rose by 8% to 55.5 million sq ft, the highest annual supply ever recorded in a single calendar year.

Despite this record supply, demand significantly outpaced new completions, leading to a sharp improvement in occupancy levels. The pan-India vacancy rate saw a notable decline of 310 basis points, dropping from 13.9% in 2024 to 10.8% in 2025. While most major cities saw improved vacancy levels, Pune was the lone outlier, experiencing a 4.6% increase in vacancy due to a massive 12 million sq ft of new supply added during the year.

Sectoral diversification also played a key role in the market's depth, though the IT-ITeS sector remained the dominant force with a 38% share of total absorption. This was followed by the BFSI and flex space sectors, which each contributed 14% to the leasing activity, noted the report.

Within the IT-ITeS segment, GCCs were particularly influential, contributing to "nearly 60% of the total area transacted by the IT-ITeS sector, reaffirming their central role in market expansion".

Geographically, Bengaluru led the GCC charge with a 32% share of the total GCC absorption, while the National Capital Region (NCR) witnessed a dramatic rise, with its GCC share jumping from 18% in 2024 to 45% in 2025.

Reflecting on the record-breaking year, Vestian's report noted that "despite global uncertainties, 2025 emerged as a landmark year for India's office market, registering the highest-ever absorption and new completions in a single calendar year".

The firm highlighted that "sustained demand from GCCs, robust economic growth, and a growing preference for Grade A and green-certified office spaces kept leasing activity strong across major cities". Looking ahead, the momentum is expected to continue into 2026, with absorption projected to reach between 85-90 million sq ft as the share of GCCs in total leasing is anticipated to exceed 50%.

- ANI