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Office Leasing Holds Steady Across Major Cities in 2025
Real Estate

Office Leasing Holds Steady Across Major Cities in 2025

Office space absorption across six major Indian cities stood at 75.2 million square feet at the end of calendar year 2025, broadly in line with levels recorded in the previous year, according to a report released on Monday.

The report by real estate advisory firm Savills India said Bengaluru, Delhi-NCR and Mumbai emerged as the top three performing markets, together accounting for nearly 61 per cent of total gross leasing activity during the year. It added that total office demand is expected to remain steady at around 75 million square feet in 2026.

On the supply side, new office completions stood at 58.2 million square feet in 2025 and are projected to rise sharply to about 90.8 million square feet in 2026. Savills noted that the leasing figures include only fresh lease transactions and exclude pre-commitments and lease renewals. The overall Grade A office stock reached 846.9 million square feet in 2025 and is expected to expand to 937.7 million square feet next year.

Despite global uncertainties, India’s office market ended 2025 on a resilient note, driven largely by new entrants and expansion-led demand from global capability centres, said Naveen Nandwani, Managing Director, Commercial Advisory and Transactions, Savills India. He added that the outlook for 2026 remains positive, supported by continued growth from global capability centres, technology firms and the banking, financial services and insurance sector.

While the strong supply pipeline may lead to a marginal increase in vacancy levels, it is also expected to provide occupiers with access to higher-quality office spaces. As a result, rental growth is likely to remain largely range-bound, with limited upside in select micro-markets, Nandwani said.

At the city level, Bengaluru led the market with gross absorption of 20.2 million square feet, followed by Delhi-NCR at 13.6 million square feet and Mumbai at 12.1 million square feet. The IT-BPM sector and flexible workspaces continued to dominate leasing activity, accounting for 33 per cent and 15 per cent of total absorption respectively.

Leasing volumes in Bengaluru declined by around 12 per cent year on year, reflecting more measured expansion decisions by occupiers and delayed deal closures amid global uncertainty. Chennai, Hyderabad and Pune recorded absorption of 9.1 million, 11.4 million and 8.8 million square feet respectively. In Hyderabad, global capability centre transactions accounted for about 43 per cent of total leasing activity.

Office space absorption across six major Indian cities stood at 75.2 million square feet at the end of calendar year 2025, broadly in line with levels recorded in the previous year, according to a report released on Monday. The report by real estate advisory firm Savills India said Bengaluru, Delhi-NCR and Mumbai emerged as the top three performing markets, together accounting for nearly 61 per cent of total gross leasing activity during the year. It added that total office demand is expected to remain steady at around 75 million square feet in 2026. On the supply side, new office completions stood at 58.2 million square feet in 2025 and are projected to rise sharply to about 90.8 million square feet in 2026. Savills noted that the leasing figures include only fresh lease transactions and exclude pre-commitments and lease renewals. The overall Grade A office stock reached 846.9 million square feet in 2025 and is expected to expand to 937.7 million square feet next year. Despite global uncertainties, India’s office market ended 2025 on a resilient note, driven largely by new entrants and expansion-led demand from global capability centres, said Naveen Nandwani, Managing Director, Commercial Advisory and Transactions, Savills India. He added that the outlook for 2026 remains positive, supported by continued growth from global capability centres, technology firms and the banking, financial services and insurance sector. While the strong supply pipeline may lead to a marginal increase in vacancy levels, it is also expected to provide occupiers with access to higher-quality office spaces. As a result, rental growth is likely to remain largely range-bound, with limited upside in select micro-markets, Nandwani said. At the city level, Bengaluru led the market with gross absorption of 20.2 million square feet, followed by Delhi-NCR at 13.6 million square feet and Mumbai at 12.1 million square feet. The IT-BPM sector and flexible workspaces continued to dominate leasing activity, accounting for 33 per cent and 15 per cent of total absorption respectively. Leasing volumes in Bengaluru declined by around 12 per cent year on year, reflecting more measured expansion decisions by occupiers and delayed deal closures amid global uncertainty. Chennai, Hyderabad and Pune recorded absorption of 9.1 million, 11.4 million and 8.8 million square feet respectively. In Hyderabad, global capability centre transactions accounted for about 43 per cent of total leasing activity.

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