23, July 2025: Office space absorption across India’s six[1] major cities stood at 38.2 mn sq. ft., as of June 2025, marking a 7% year-on-year increase, according to International real estate advisory firm Savills India. Meanwhile, new supply saw a significant uptick, with 25.3 mn sq ft of completions in H1 2025- representing a 44% YOY growth. Overall vacancy rate at the end of June declined to 14.7% from 15.9% last year. Consequently, India’s total Grade A office stock now stands at 822.9 mn sq. ft. as of Q2 2025.
India’s office absorption is projected to exceed 70 mn sq. ft. in 2025, driven by growing occupier confidence and a strong pipeline of quality supply catering to evolving workplace needs.
It is important to note that the figures presented pertain exclusively to fresh lease transactions and do not include pre-commitments or lease renewals.
Key Highlights of H1 2025 for India office market
- India recorded a gross office space demand of 38.2 mn sq. ft., in H1 2025, registering a 7% annual growth. Leasing activity in Q2 2025 stood at 18.8 mn sq. ft., reflecting a marginal decline of 3% compared to the previous quarter. In contrast, new supply saw a sharp quarter-on-quarter increase of 94%, reaching 16.7 mn sq. ft.
- Bengaluru remained the top contributor to overall office leasing activity in India, accounting for 27% of the total absorption in H1 2025, followed by Delhi-NCR and Mumbai.
- The technology sector led leasing activity, accounting for 34% of total absorption, followed by the flexible workspaces and BFSI sectors, each contributing 16%, while the engineering and manufacturing sector also emerged as a notable contributor with an 11% share.
- Large deals (100,000 sq. ft. or more) continued to lead office leasing in H1 2025, contributing 45% to the total transaction volume.
- Global Capability Centres (GCCs) remained a key demand driver for office space in India, accounting for nearly 41% of total leasing activity with approximately 16 mn sq. ft.,. Bengaluru, Chennai, and Hyderabad collectively recorded approximately 12 mn sq. ft. of GCC-driven leasing during the period.
CITY-WISE KEY TRENDS
- Bengaluru reinforced its leadership in India’s office market in H1 2025 with 10.4 mn sq. ft. of gross absorption, driven by sustained demand for quality workspaces. GCC’s accounted for nearly 67% of the city’s leasing activity, reflecting continued interest from global firms leveraging the city’s skilled workforce, business ecosystem, and steady Grade A supply. Leasing was further supported by strong activity from IT-BPM and engineering & manufacturing occupiers, accounting for around 60% of the total leasing activity.
- Delhi-NCR recorded 6.8 mn sq. ft. of gross absorption in H1 2025, ranking second after Bengaluru. The IT-BPM and BFSI sectors continued to lead leasing activity, contributing 31% and 21% to the overall volumes, respectively. GCCs remained prominent demand drivers, accounting over 25% of total leasing, with several pre-commitments materializing in H1 as new supply reached completion and entered the market.
- Mumbai is the third largest demand market in H1 2025 that recorded as 6.7 mn sq. ft. in H1 2025. Technology and financial services occupiers together dominated the leasing activity with a cumulative 58% share.
- Chennai registered 5.5 mn sq. ft. of gross leasing in H1 2025, reflecting a notable 14% YoY increase, fuelled by robust demand from occupiers in the IT-BPM, BFSI, and flexible workspace sectors. Large deals (100,000 sq. ft. or more) accounted for 58% of the total activity, highlighting occupiers’ focus on scalable office spaces.
- Hyderabad recorded 4.8 mn sq. ft. of gross office absorption in H1 2025, reflecting a 20% YoY decline — a sign of temporary slowdown driven by prolonged decision-making cycles and shifting occupier strategies. GCCs remained active, accounting for 50% of the gross leasing with approximately 2.4 mn sq. ft. of space transacted.
- Pune witnessed a supply infusion of 7.0 mn sq. ft. during H1 2025, marking a 2.4X YOY increase and registering the highest half-yearly supply peak in the past two decades. With the gross absorption reaching 4.1 mn sq. ft., GCCs continued their expansion by leasing 0.9 mn sq. ft. Notably, BFSI GCCs led this growth, accounting for 61% of total GCC space take-up.