Is India's Office Leasing Surging by 24% This Year?
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Synopsis
India's office leasing market has achieved remarkable growth, surpassing 1 billion square feet in Q3 2025. A report highlights a 24% year-to-date increase, driven primarily by Grade A leasing. The resilience of India's office market underscores its growing appeal as a hub for IT services, supported by a strong talent pool and rising rental rates.
Key Takeaways
- India's office market exceeds 1 billion sq ft.
- 24% growth in year-to-date leasing volumes.
- Bengaluru leads with 4.2 million sq ft leased.
- Grade A properties dominate leasing activity.
- QTS remains stable below 18 months.
New Delhi, Oct 7 (NationPress) India’s office sector has exceeded 1 billion square feet in the third quarter of 2025, with a remarkable 24% year-to-date (YTD) growth compared to last year, setting the stage for a potential annual record, according to a recent report.
Despite the promising trajectory towards a new annual peak, the report from the real estate services firm Knight Frank highlighted that the leasing activity this quarter was predominantly driven by Grade A properties, which constituted 88% of quarterly volumes and 92% YTD.
The cities of Bengaluru, Mumbai, and the National Capital Region contributed to half of the total transactions, with Bengaluru leading the way with 4.2 million square feet leased in Q3 2025.
Hyderabad and Chennai also played a vital role in the volume surge this quarter, experiencing year-over-year increases of 33% and 9%, respectively.
Global Capability Centres (GCCs) accounted for approximately 5.7 million sq ft of office space deals, representing a significant 32% of all occupier segments. Bengaluru emerged as the preferred city for GCC activities, capturing a striking 65% of this leasing in Q3 2025.
Moreover, rental rates in major office markets like Mumbai, NCR, and Bengaluru rose by 11%, 9%, and 6% year-over-year, respectively. With the global adoption of AI on the rise, India’s extensive talent pool and cost advantages continue to enhance its attractiveness as a hub for outsourced IT services.
The Quarters to Sell (QTS) metric has consistently remained below 18 months in the eight key markets throughout the past year. This metric reflects the time necessary to absorb existing inventory based on the average sales pace over the last eight quarters. The steadiness of QTS in India’s office market, despite an increase in inventory, highlights the underlying resilience of market fundamentals.
Point of View
It is evident that the substantial growth in India's office leasing market reflects the country's robust economic fundamentals. The focus on Grade A properties and the rise of Global Capability Centres signify a positive shift towards high-quality, sustainable office spaces. This trend reinforces India's position as a competitive player in the global IT services market.
NationPress
07/10/2025
Frequently Asked Questions
What factors are contributing to the growth of India's office leasing market?
The growth is primarily driven by Grade A properties, increased demand from Global Capability Centres, and a strong talent pool in major cities.
Which cities are leading in office leasing volumes?
Bengaluru, Mumbai, and the National Capital Region are the top cities, with Bengaluru leading the way.
How has rental pricing changed in major markets?
Rental prices in Mumbai, NCR, and Bengaluru have seen year-over-year increases of 11%, 9%, and 6%, respectively.
What does the Quarters to Sell (QTS) indicator signify?
QTS measures the time required to absorb current inventory based on past sales rates, and it has remained below 18 months, indicating market stability.
What is the significance of Grade A leasing in this report?
Grade A leasing represents the majority of transactions, indicating a preference for high-quality office spaces among businesses.
