India’s office property market quietly staged a solid comeback. After lagging in a few quarters, rentals in the top seven cities have risen 6% year-on-year, according to new data from Anarock Research. The average monthly rent now stood at Rs 90 per sq ft, up from Rs 85 per sq ft last year.
Bengaluru led the surge with a 9% jump, while Pune turned out to be the surprise story office absorption there almost doubling in a year. The Anarock report indicated that demand for quality workspace returned. Meanwhile, the southern part of India continued to anchor India’s commercial cycle.
Demand holds firm even as supply grows
India’s office market showed steady, with real improvement. Across the seven main cities, companies took up 42 million sq. ft. of space in the first nine months of 2025, around 34 per cent more than the 31.3 million sq. ft. leased a year earlier, and around 30 per cent higher than in 2019, before the pandemic. Vacancy also improved slightly, falling to 16.2 per cent from 16.7 per cent last year. This came even as developers added more space, 39.21 million sq. ft., up 15 per cent from 34.07 million sq. ft. a year ago.
The fact that vacancy is narrowing despite higher supply shows that demand is steady across cities and sectors. It points to a market that is expanding in a balanced way, rather than one driven by short-term spikes.
South India leads: Bengaluru, Pune, and Chennai stay ahead
Bengaluru remains the country’s commercial bellwether.
It saw the highest net leasing at 9.95 million sq. ft., up from 8.15 million sq. ft. a year ago. The city’s vacancy fell to 12.2% from 13%, and its new completions rose 20% to 10.41 million sq. ft.
Pune has emerged the office space market in focus. Office space take-up in the city almost doubled, rising 97 per cent to 6.2 million sq. ft. from 3.14 million sq. ft. last year. It also saw the biggest jump in new office supply, up 168 per cent to 9.2 million sq. ft. Developers are responding to strong demand from IT firms, banks, and global capability centres that are expanding beyond Bengaluru. Chennai continues to be the most stable market, with the lowest vacancy rate at 8.9 per cent. Its office absorption rose 56 per cent to 4.5 million sq. ft. from 2.88 million sq. ft., driven by steady demand from technology and manufacturing companies.
Delhi-NCR and MMR steady; Hyderabad and Kolkata mixed
Delhi-NCR recorded 8.2 million sq ft of new office leases, a 24 per cent rise from last year. Mumbai followed with 6.6 million sq ft, up 31 per cent. Both cities continue to attract demand in prime business areas, though older buildings are finding it harder to draw tenants.
Hyderabad saw 5.7 million sq. ft. of leasing, up 29 per cent, but still has one of the highest vacancy levels at 26.5 per cent, showing there is more supply than demand in some parts of the city. Kolkata was the only market to fall, with office leasing down 19 per cent to 0.85 million sq ft from 1.05 million sq ft a year ago.
GCCs drive leasing momentum
The rebound is being driven not just by local companies expanding but also by a strong push from global capability centres.
“Multiple factors are driving office space demand in the country despite all headwinds. GCCs are a major driver of office space leasing in the top seven cities,” said Anuj Puri, Chairman, Anarock Group.
Out of 58.28 million sq. ft. of total office leasing during the first nine months of 2025, about 23.34 million sq ft, a little over 40 per cent, was taken up by GCCs, the report said. Bengaluru led with 8.3 million sq ft, followed by Pune with 3.73 million sq ft and Chennai with 3.57 million sq ft.
These centres, which handle engineering, finance, and technology operations for global companies, are creating a more stable tenant base and longer lease cycles, helping landlords achieve steadier rental income, according to the report.
“Several companies are now looking for high-quality Grade A office spaces with better infrastructure and amenities, and green-certified sustainability features,” Puri said in the official statement.
Newer projects with modern design, better connectivity, and ESG compliance are commanding rent premiums of around 10–15%, according to market estimates. Bengaluru and Pune together accounted for half of all new completions during the period, while NCR nearly doubled its supply to 6.7 million sq. ft.
By contrast, both Hyderabad and MMR saw declines in new office supply down 39% and 41%, respectively as developers held back amid high vacancy or delayed projects.
Coworking gains, IT remains dominant
The composition of demand was also seen to be changing. IT and ITeS companies still occupied the largest share of space, 27% of total leasing, but coworking has gained ground up to 23% this year from 21% in 2024. BFSI accounted for 18%.
The rise of coworking indicated how occupiers are balancing hybrid work and cost efficiency. Many start-ups and mid-size firms are now choosing flexible spaces over traditional leases. For landlords, this trend means steadier occupancy, even if at slightly lower yields and fewer long vacant periods.
Vacancy trends show Penninsular India still strongest
The nationwide average vacancy of 16.2% hides wide differences between cities. Chennai, at 8.9%, recorded the tightest market, followed by Pune at 11.85% and Bengaluru at 12.2%. These cities operated close to full capacity in premium office spaces. In contrast, NCR’s vacancy stood at 22% and Hyderabad’s at 26.5%, showing that both still have excess supply in some areas. Mumbai’s overall vacancy is around 14.9%, with newer buildings in BKC and Navi Mumbai performing better than older offices in Andheri and Powai.
For tenants, this meant more negotiating power in Delhi and Hyderabad, but tightening options in Bengaluru and Chennai could be a likely reason why the rents there rose faster.