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India’s office sector delivered its strongest performance on record in 2025, according to Cushman & Wakefield’s Office Q4 2025 MarketBeat report (released in January 2026). Net absorption across the top eight cities reached a historic 61.4 million square feet (MSF)—a robust 25% year-on-year (YoY) increase from 49.1 MSF in 2024. This milestone underscores deep occupier confidence, sustained expansion by global capability centres (GCCs), IT-BPM, BFSI, engineering & manufacturing, and flex operators, alongside structural advantages like India’s talent pool, technology adoption, and infrastructure progress.

Gross leasing volume (GLV) held steady at approximately 88.7–89 MSF, matching the previous year’s record high and marking the fourth consecutive year of elevated activity. Fresh leasing dominated, comprising nearly 80% of GLV, signaling ongoing expansionary strategies and preference for modern, high-quality spaces.

Key Demand Trends

Demand was led by GCCs, which accounted for nearly one-third of total leasing. The market’s resilience shone through with consistent quarterly momentum, including strong Q4 contributions that capped a record-breaking year.

City-wise Net Absorption in 2025 (with YoY change):

• Bengaluru: 14.4 MSF (23% national share)
• Delhi NCR: 10.9 MSF (18% share), up 82% YoY
• Mumbai: 9.6 MSF
• Hyderabad: 9.1 MSF, up 15% YoY
• Pune: 8.2 MSF
• Chennai: 7.0 MSF, up 187% YoY (sharpest growth)
• Kolkata: 1.4 MSF, down 5% YoY
• Ahmedabad: 0.8 MSF, down 28% YoY

Bengaluru and Delhi NCR together contributed over 40% of national absorption, driven by core business districts, improved connectivity, and occupier preference for scalable, amenity-rich environments.

Supply and Vacancy Dynamics

New supply reached a record ~53 MSF in 2025, up 17% YoY, with Bengaluru and Pune accounting for nearly 49% of completions. Despite this elevated delivery, net absorption outpaced supply in most key markets, resulting in significant vacancy compression.

Overall vacancy declined by 210 basis points (bps) YoY—the steepest annual drop on record—highlighting the market’s ability to absorb new inventory amid strong demand. The “flight to quality” continued, with occupiers prioritizing Grade A and A+ buildings featuring sustainability features, modern amenities, and strategic locations.

Pricing Insights

Rents rose across all eight major cities, supported by tightening vacancies and sustained leasing. Annual rental growth was led by:

• Hyderabad and Mumbai: 12–14% YoY
• Ahmedabad, Delhi NCR, and Chennai: 6–9% YoY

Premium submarkets and superior-grade assets commanded the highest increases, reflecting limited availability of high-quality space and occupier willingness to pay for better environments.

Outlook for 2026 and Beyond

Cushman & Wakefield’s India Outlook 2026 (released January 2026) projects continued momentum in the commercial office sector, with leasing activity remaining robust and net absorption expected near 55 MSF—slightly moderated from 2025’s peak but still exceptionally strong. New completions are forecasted at 59–61 MSF, with nearly half in Grade A+ developments.

Key tailwinds include:

• Ongoing GCC expansion and diversification beyond traditional IT sectors.
• Rising adoption of flexible/managed workspaces (projected to surpass 100 MSF stock by 2026).
• Infrastructure enhancements improving accessibility in emerging corridors.
• Preference for sustainable, high-quality buildings amid evolving workplace needs.

While supply remains elevated in select cities, structural demand—bolstered by India’s global enterprise appeal—supports vacancy stability or further tightening in prime locations. For investors and REITs, 2025’s record absorption improves cash-flow visibility, rental upside, and yield potential, particularly in core markets like Bengaluru, Delhi NCR, and Hyderabad.

Occupiers pursuing large-scale, premium spaces may encounter growing competition in 2026, while the sector’s resilience positions India as a leading global office hub amid worldwide uncertainties.

For full details, refer to Cushman & Wakefield’s official India Office Q4 2025 MarketBeat report and India Outlook 2026.