India's Office Market Set to Shatter Records with 90 MSF Leasing Milestone in 2025

Industry experts have reported that India's commercial office leasing market is experiencing unprecedented momentum, positioning itself to achieve a landmark 90 million square feet (MSF) absorption by year-end. This projection comes as the sector demonstrates remarkable resilience with consistent quarter-over-quarter growth fueled by expanding global capability centers, technology services firms, and flexible workspace operators.

Q2 2025 Performance Exceeds Expectations

Market analysts revealed that the second quarter of 2025 recorded gross leasing volumes of 23 MSF, marking a 5% increase from the previous quarter. This performance underscores the sustained appetite for premium office spaces across India's major commercial hubs, reflecting robust occupier confidence in the market's long-term prospects.

Regional Distribution Shows Balanced Growth Across Key Markets

Data indicates that Bengaluru maintained its leadership position with 6.4 MSF of leasing activity, while Delhi-NCR's commercial real estate market secured 4.6 MSF. Hyderabad followed closely with 4.5 MSF, demonstrating the diversified nature of India's office leasing landscape. Mumbai's premium office locations and Pune also reported healthy demand patterns, while Kolkata and Ahmedabad showed steady traction in their respective markets.

Pre-commitment Rates Signal Strong Future Demand

Industry sources noted that pre-commitment rates for upcoming Grade A office developments continue to rise, indicating sustained occupier sentiment. This trend suggests that tenants are securing future space requirements well in advance, providing developers with greater certainty for their pipeline projects.

Sector Diversification Drives Market Expansion

While the IT-BPM sector remained a primary driver of leasing activity, market observers highlighted the expanding presence of engineering, manufacturing, and banking, financial services, and insurance (BFSI) tenants. This diversification is creating a more stable foundation for India's commercial office market, reducing dependency on any single sector.

Significantly, flexible workspace operators contributed nearly 20% of new leasing activity, reflecting the growing preference for hybrid workplace models among organizations of all sizes.

Historic Achievement Within Reach

The cumulative office leasing for the first half of 2025 exceeded 45 MSF, establishing a strong foundation for achieving the projected 90 MSF target. Industry analysts emphasized that surpassing this milestone would represent a significant achievement, exceeding the previous peak of 80 MSF recorded in 2023 and establishing 2025 as the strongest year in Indian commercial office real estate history.

Supply Side Responds to Growing Demand

Developers and institutional landlords are actively responding to market demand by increasing supply, with particular focus on energy-efficient, technology-integrated buildings located in core business districts. This emphasis on sustainable office developments aligns with corporate tenants' environmental, social, and governance (ESG) objectives.

Market Outlook Remains Optimistic

As demand patterns broaden and office formats continue to evolve, projections indicate that India's top seven cities will maintain strong leasing momentum throughout the remainder of 2025. The market's ability to adapt to changing workplace requirements while delivering consistent growth demonstrates the maturity and resilience of India's commercial real estate sector.

This growth trajectory is further supported by ongoing infrastructure development projects and the continued expansion of multinational corporations establishing global capability centers across India, positioning the country as a preferred destination for international business operations.