India office leasing touches record 86.4 mn sq ft in 2025: Knight Frank

India's office real estate market posted its strongest performance on record in 2025, with annual gross leasing touching an all-time high of 86.4 million square feet, according to Knight Frank India's latest India Real Estate - Office and Residential Market (H2 2025) report.

Leasing activity rose 20% year-on-year, surpassing the previous peak achieved in 2024 and marking a 43% increase over pre-pandemic levels recorded in 2019. The surge underscores sustained occupier confidence and India's growing prominence as a global business destination.

Bengaluru continued its dominance as the largest office market grossing 28 mn sq ft, a historic best for this market. Hyderabad (11.4 mn sq ft), National Capital Region (NCR) (11.3 mn sq ft), Pune (10.8 mn sq ft) and Chennai (10.1 mn sq ft) all crossed a 10 mn sq ft benchmark, with Mumbai (9.8 mn sq ft) narrowly missing the line. GCCs drove demand commanding 38% of the total absorption, the report highlighted.

Global Capability Centres (GCCs) emerged as the dominant demand driver, accounting for 38% of total office absorption during the year. Bengaluru alone captured nearly half of GCC-related leasing, reinforcing its status as India's primary hub for research, technology, and global operations.

Flexible workspace operators and third-party IT services also posted their highest-ever annual leasing volumes, reflecting renewed confidence among technology-led occupiers.

Despite robust demand, new office supply lagged behind leasing activity. Office completions increased 9% year-on-year to 54.8 million sq ft in 2025, with Bengaluru and Pune accounting for the bulk of new additions.

The supply-demand imbalance led to firm rental growth across all major markets, with NCR and Hyderabad witnessing annual rental appreciation of 10%, followed by Mumbai and Bengaluru at 6% each, the report mentioned.

Knight Frank noted that Grade A office space continued to dominate occupier preferences, accounting for over 90% of total leasing during the year, as companies increasingly prioritised modern infrastructure, sustainability, and long-term operational efficiency.

With demand momentum expected to carry into 2026, and limited near-term supply additions, the Indian office market is poised to remain one of the strongest performers globally despite ongoing geopolitical and economic uncertainties.