How Much Has India's Office Leasing Grown in 2025?
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Synopsis
India's office leasing market is on a record-breaking path, surpassing 1 billion square feet with a stunning 24% growth in 2025. Discover the driving forces, key regions, and future trends shaping this dynamic sector.
Key Takeaways
- India's office leasing market has crossed 1 billion square feet.
- Year-to-date growth is at an impressive 24% YoY.
- Grade A offices are driving the majority of leasing activity.
- Bengaluru leads in leasing volumes among Indian cities.
- Rental rates in major markets are on the rise.
New Delhi, Oct 7 (NationPress) The office leasing sector in India has crossed 1 billion square feet by the end of the third quarter of 2025, reflecting a remarkable 24 percent year-on-year (YoY) growth in year-to-date (YTD) volumes, as indicated by a recent report. This positions the market for a potential record-setting year.
Despite this upward trajectory, the report from the real estate service firm Knight Frank highlights that the leasing activity during this quarter was predominantly driven by Grade A office spaces, which constituted 88 percent of quarterly leasing and 92 percent of YTD transactions.
Regions such as Bengaluru, Mumbai, and the National Capital Region were responsible for half of the total leasing volumes, with Bengaluru leading the way with 4.2 million square feet leased in Q3 2025.
Hyderabad and Chennai also made significant contributions, recording growth rates of 33 percent and 9 percent YoY, respectively.
Global Capability Centres (GCCs) represented around 5.7 million square feet of office space transactions, making up the largest segment at 32 percent of total leasing. Bengaluru emerged as the preferred city for this sector, accounting for an impressive 65 percent of GCC leasing activity in Q3 2025.
Additionally, rental rates in major office markets such as Mumbai, NCR, and Bengaluru saw increases of 11 percent, 9 percent, and 6 percent YoY, respectively. With the rapid adoption of AI on a global scale, India's abundant talent pool and cost-effectiveness continue to bolster its position as a leading destination for outsourced IT services.
The Quarters to Sell (QTS) metric has consistently remained below 18 months across eight key markets over the past year, indicating the time necessary to clear current inventory based on the sales pace of the last eight quarters. The stability of the QTS in India's office market, despite an increase in inventory, highlights the robustness of the market fundamentals.
Point of View
It is crucial to recognize that India's office leasing market is demonstrating remarkable resilience and growth. The trends indicate a promising future, particularly with the emphasis on Grade A spaces and the pivotal role of key cities like Bengaluru and Mumbai. This growth reflects not only economic recovery but also the country's strategic positioning as a tech hub.
NationPress
07/10/2025
Frequently Asked Questions
What is driving the growth in India's office leasing market?
The growth is primarily driven by an increase in Grade A leasing, significant contributions from major cities, and a surge in demand from Global Capability Centres.
Which cities are leading in office leasing activity?
Bengaluru, Mumbai, and the National Capital Region are the front runners, with Bengaluru accounting for the largest share of transactions.
How much has the rental rate increased in major markets?
Rental rates have increased by 11% in Mumbai, 9% in NCR, and 6% in Bengaluru year-on-year.
What is the Quarters to Sell (QTS) indicator?
The QTS indicator measures the time required to absorb current inventory based on historical sales pace, and it has remained stable below 18 months in key markets.
What does the growth of the office leasing market indicate about India's economy?
The growth reflects a robust economic recovery and the country's appeal as a hub for outsourced IT services, bolstered by a strong talent pool.
