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Office Rents Rise 6% Amid Strong Demand—What's Driving India's Real Estate Boom?

India's commercial office sector is showing remarkable resilience with steady rental growth. Office rentals increased by 6% year-over-year, reaching Rs 90 per square foot in the first nine months of 2025. Bengaluru emerged as the top market with nearly 10 million square feet of net leasing, while Pune saw an astonishing 97% growth in absorption. Despite global economic challenges, demand for quality office spaces remains strong, driven by GCCs and evolving workplace preferences.

Key Points: Commercial Office Rentals Grow 6% to Rs 90 per Sq Ft in 9M 2025

  • Office rentals increased from Rs 85 to Rs 90 per sq ft across top 7 cities
  • IT/ITeS sector leads leasing at 27% despite 1% decline
  • Pune recorded massive 97% growth in net office absorption
  • Bengaluru dominated with highest net leasing of 9.95 million sq ft
  • Coworking spaces gained 2% share as hybrid work models expand
  • Global Capability Centers leased 40% of total office space in 9M 2025
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Commercial office rental grows 6 pc YoY to Rs 90 per sq ft in 9M 2025

India's top 7 cities see 6% yearly rental growth with strong office absorption. Bengaluru leads leasing while Pune records 97% growth in net absorption.

"Several companies are now looking for high-quality Grade A office spaces with better infrastructure and amenities, and green-certified sustainability features. - Anuj Puri, Chairman – ANAROCK Group"

New Delhi, Oct 28

The commercial office real estate sector is growing steadily across the top 7 cities with a 6 per cent yearly rise in monthly office rentals – from Rs 85 per square feet (Sq. ft.) in first nine months (9M) of 2024 to Rs 90 per sq. ft. in 9M 2025, a report said on Tuesday.

Predictably, the Information Technology and Information Technology Enabled Services (IT/ITeS) sector comprised the largest share, at 27 per cent, followed by coworking at 23 per cent and BFSI at 18 per cent.

"Compared to last year’s corresponding period, the IT/ITeS sector’s leasing share declined marginally by 1 per cent. On the other hand, coworking saw an overall share increase of 2 per cent - from a 21 per cent share in 9M 2024 to a 23 per cent share in 9M 2025," Anarock Research said in its report.

Among the cities, Pune witnessed the highest growth of 97 per cent in net office absorption - from 3.14 Mn sq. ft. in 9M 2024 to approx. 6.2 Mn sq. ft. in 9M 2025. Kolkata was the only city to record a decline in net office leasing, of 19 per cent.

Bengaluru witnessed the highest net office leasing of approximately 9.95 million sq. ft., followed closely by Delhi-NCR with net office leasing of approximately 8.2 million sq. ft. and MMR with approximately 6.6 Mn sq. ft

Demand for flexible workspaces has been evolving post-pandemic, with companies adapting to hybrid work models, cost efficiency, and flexibility. Start-ups and corporates, and several other enterprises with a hybrid work model, prefer coworking spaces over regular office spaces.

In contrast, despite increased new office completions in the top 7 cities, average vacancy levels saw a marginal 3 per cent yearly decline – from 16.70 per cent in 9M 2024 to 16.20 per cent in 9M 2025.

Chennai is the only city to record a single-digit office vacancy of 8.90 per cent - the least among all top cities, the report stated.

Global headwinds, including tariffs, geopolitical tensions, and layoffs in IT/ITeS sectors, seem to have had no negative impact on office space demand in the top cities.

Office absorption continued to soar by 34 per cent – from 31.31 million square feet in 9M 2024 to 42 Mn square feet in 9M 2025.

“For instance, out of the total gross office leasing of 58.28 Mn sq. ft. in 9M 2025, over 40 per cent or approx. 23.34 Mn sq. ft. was leased by the GCCs alone. Bengaluru saw the highest gross leasing of 8.3 Mn sq. ft. by GCCs, followed by Pune with 3.73 Mn sq. ft. and Chennai with 3.57 Mn sq. ft," said Anuj Puri, Chairman – ANAROCK Group.

“Several companies are now looking for high-quality Grade A office spaces with better infrastructure and amenities, and green-certified sustainability features,” Puri added.

- IANS

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Reader Comments

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Rohit P
As a startup founder in Bangalore, I can confirm the shift towards coworking spaces. The flexibility and cost savings are huge for growing companies like ours. The 23% share for coworking makes complete sense.
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Sarah B
While the growth numbers look impressive, I'm concerned about the rising rental costs. Rs 90 per sq ft might be affordable for MNCs, but what about smaller Indian businesses? The focus on Grade A spaces could price out local entrepreneurs.
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Arjun K
Chennai's single-digit vacancy rate of 8.90% shows how well-managed the commercial real estate market is there. Other cities should learn from their model. The GCC dominance in leasing is also noteworthy - shows India's growing importance as a global hub.
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Michael C
The 34% increase in office absorption is remarkable! This data clearly indicates that the hybrid work model hasn't killed office demand, but rather transformed it. Companies are being smarter about their real estate choices now.
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Kavya N
Interesting to see Kolkata being the only city with declining office leasing. As someone from West Bengal, I hope the state government takes note and creates more business-friendly policies to attract investments. We need to catch up with other metros.

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