Net Office Leasing Sees 40% Y-o-Y Rise in Top 7 Cities in H1 2025, New
Supply Up 25%
· Top 7 cities record
net office leasing of approx. 26.8 Mn sq. ft. against nearly 19.08 Mn sq. ft.
back in H1 2024
· Among the cities,
Bengaluru saw the highest net leasing of approx. 6.55 Mn sq. ft. in the period
against 4 Mn sq. ft. in the corresponding period last yr, thus recording a 64%
yearly jump
· Meanwhile, the top
7 cities recorded 25% increase in new office completions in H1 2025 – from
19.65 Mn sq. ft. in H1 2024 to nearly 24.51 Mn sq. ft. in first half this year
· Again, Bengaluru
saw the highest new office supply addition in the first half this year (of
approx. 6.91 Mn sq. ft.) as against 5.5 Mn. sq. ft. last Yr, thus seeing 26%
yearly rise
· Sector-wise,
IT/ITeS continues to dominate office space demand with 29% overall leasing
share, followed by Co-working comprising 22% share & BFSI with 18% share
· Office vacancy
dropped marginally to 16.30% in H1 2025 from 16.70% back in H1 2024 across top
cities
· Avg. monthly office
rentals increased 5% - from INR 84 per sq. ft. in H1 2024 to INR 88 per sq. ft.
in H1 2025; Chennai recorded the highest 6% yearly rise
Mumbai 3 July 2025: While the Indian residential market
stabilizes amid declining sales and new supply, the commercial office real
estate is on a roll across the top 7 cities. Latest ANAROCK Research data
reveals a 40% yearly rise in net office absorption – from approx. 19.08 Mn sq.
ft. in H1 2024 against approx. 26.8 Mn sq. ft. in H1 2025.
As expected, Bengaluru led with approx. 6.55 Mn sq. ft. office space
leased in the first half of this year, against approx. 4 Mn sq. ft. at the end
of H1 2024 - a 64% yearly increase.
· In terms of annual
net absorption growth, Pune recorded the highest with 188% - from approx. 1.32
Mn sq. ft. in H1 2024 to approx. 3.8 Mn sq. ft. in H1 2025
· Kolkata was the
only city to see a drop (of 51%) in net office absorption – from approx. 0.93
Mn sq. ft. in H1 2024 to approx. 0.45 Mn sq. ft. in H1 2025
|
Net Office Absorption (In Mn Sq. ft.) |
|||
|
City |
H12025 |
H12024 |
% Change (H1 2025 Vs H1 2024) |
|
Bangalore |
6.55 |
4 |
64% |
|
MMR |
4.5 |
3.15 |
43% |
|
NCR |
5 |
4.66 |
7% |
|
Chennai |
2.3 |
1.9 |
21% |
|
Hyderabad |
4.2 |
3.12 |
35% |
|
Pune |
3.8 |
1.32 |
188% |
|
Kolkata |
0.45 |
0.925 |
-51% |
|
Total |
26.8 |
19.075 |
40% |
Source: ANAROCK Research & Advisory
Office Supply
In terms of new office completions, the top 7 cities recorded a 25%
increase in the period – from approx. 19.65 Mn sq. ft. in H1 2024 to approx.
24.51 Mn sq. ft. in H1 2025. Again, Bengaluru superseded all other top cities
with a total new office supply of approx. 6.91 Mn sq. ft. added in first half
of 2025, against 5.5 Mn sq. ft. in H1 2024 - a 26% yearly growth.
· MMR and Hyderabad
were the only cities to see a drop in new supply addition in H1 2025 - by 45%
and 17%, respectively. MMR added approx. 1.9 Mn sq. ft. office space in H1 2025
as against approx. 3.47 Mn sq. ft. in H1 2024. Hyderabad saw approx. 4.7 Mn sq.
ft. of new supply in H1 2025, against 5.68 Mn sq. ft. in H1 2024.
· Interestingly, Pune
recorded the highest yearly jump in new office supply - a massive 533% – from
just 0.9 Mn sq. ft. in H1 2024 to over 5.7 Mn sq. ft. in H1 2025
|
New Office Completion (In Mn Sq. ft.) |
|||
|
City |
H12025 |
H12024 |
% Change (H1 2025 Vs H1 2024) |
|
Bangalore |
6.91 |
5.5 |
26% |
|
MMR |
1.9 |
3.47 |
-45% |
|
NCR |
3.7 |
2.75 |
35% |
|
Chennai |
1.5 |
1.35 |
11% |
|
Hyderabad |
4.7 |
5.68 |
-17% |
|
Pune |
5.7 |
0.9 |
533% |
|
Kolkata |
0.1 |
0 |
100% |
|
Total |
24.51 |
19.65 |
25% |
Source: ANAROCK Research & Advisory
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“The office real estate market was clearly ahead of its residential
counterpart in H1 2025," says Peush Jain, MD - Commercial Leasing
& 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.”
“The positive influence of the Indian economy's continued highest GDP
growth predictions globally on the office market cannot be overstated,"
says Jain. "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% overall leasing share, followed by the coworking sector with a
22% share and BFSI with 18%. "Interestingly, H1 2025 saw demand from these
three sectors and also consultancy businesses and e-commerce rise by 1% each
against H1 2024. On the other hand, manufacturing & industrial and other
sectors’ demand share decreased", adds Jain.
Office Vacancies
Office space vacancies across the top 7 cities collectively dropped to
16.30% in H1 2025 - a marginal improvement over the 16.70% in H1 2024. Despite
reduced new office supply in MMR and Hyderabad in the first half, office
vacancies increased in both cities – from 13% in H1 2024 to 15.10% in H1 2025
in MMR, and from 25.50% to 26.60% in Hyderabad. Currently, Hyderabad has the
highest vacancy rates among the top 7 cities.
Office Rentals
Average monthly office rentals increased by a marginal 5% - from INR
84/sq. ft. in H1 2024 to INR 88/sq. ft. in H1 2025. Chennai recorded the
highest 6% yearly 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 5% yearly
increases.
