India's Office Vacancy Drops to 17-Quarter Low as Corporate Demand Surges Across Major Cities

India's office space market has achieved its lowest vacancy rate in 17 quarters during the July to September 2025 period, defying global trends of workspace downsizing, according to data released by JLL India. The decline was attributed to increased occupier demand, robust net absorption, and a strong leasing pipeline, signaling broad-based growth across major Indian cities.

Vacancy levels reportedly dropped to 15.7 percent, compared to 16.9 percent recorded a year ago and 16.1 percent in the previous quarter. Significant year-on-year and quarter-on-quarter declines were observed in core commercial hubs including Bengaluru's office space market, Mumbai, Hyderabad, and Delhi-NCR.

Bengaluru reportedly reached a three-year low in office vacancy, while Mumbai and Delhi-NCR posted their lowest vacancy rates in 15 years, showcasing sustained momentum in office expansion activity.

India Emerges as Central Focus for Global Occupiers

Industry leaders indicated that India has now become central to the global expansion strategies of many multinational companies. Radha Dhir, CEO and Country Head, India at JLL, was cited as stating that companies were increasingly advancing post-pandemic expansion plans with India at the core, even as space constraints began to emerge in their existing portfolios.

She was quoted as saying that the country's strong performance and robust deal pipeline suggested that leasing volumes could surpass 80 million square feet by the end of 2025, marking an all-time high. The growth trajectory aligns with trends seen in India's flex space market pre-leasing surge.

Record Net Absorption and Growth Momentum

India's top seven office markets recorded nearly 40 million square feet of net absorption in the first nine months of 2025, representing a 24.8 percent year-on-year increase. The July to September quarter alone contributed 15.76 million square feet of net absorption, reflecting a 40 percent jump over the previous quarter and indicating substantial acceleration in occupier activity.

Samantak Das, Chief Economist and Head of Research at JLL India, reportedly observed that while there were some timing-related delays in Q3 transactions, the overall fundamentals pointed to a structural evolution in India's office market. He stated that the country was not just managing global economic uncertainty but was increasingly emerging as a global hub for corporate operations, similar to trends in India's office real estate growth driven by tech expansion.

Key Cities Drive Performance Across Markets

During the January to September 2025 period, cities such as Delhi-NCR real estate hotspots, Bengaluru, Pune, and Chennai posted record-high cumulative net absorption. Bengaluru led the pack with a 26.5 percent share, followed by Delhi-NCR at 24.8 percent, and Hyderabad at 13.7 percent.

Demand was reportedly driven by Global Capability Centres, including several new entrants, which together accounted for nearly half the total active demand for office space. The trend was exemplified by developments such as Australia's REA Group launching its first India GCC in Gurugram.

Technology outsourcing, propelled by advancements in artificial intelligence and next-generation platforms, also played a key role in boosting leasing activity, especially from third-party tech service providers. Major tech companies like IBM securing presence in Bengaluru exemplified this trend.

Sector-Wise Office Demand Analysis

According to JLL India's market data, the IT and ITeS sectors continued to dominate leasing activity with a 28 percent share, followed by flexible workspace providers at 19 percent. The banking, financial services, and insurance sector and manufacturing each accounted for approximately 15 to 16 percent of the market.

The growing footprint of Global Capability Centres once again underlined India's position as a strategic hub in global corporate real estate portfolios, with companies like WeWork India expanding aggressively in Delhi-NCR and WeWork's major office lease in Andheri East Mumbai.

Quarterly and Annual Growth Highlights

Delhi-NCR and Bengaluru jointly contributed 49.2 percent of total net absorption during the July to September quarter, at 24.6 percent each. Pune recorded the highest quarter-on-quarter growth at 148 percent, while Mumbai followed with 67.5 percent quarterly growth.

On a year-on-year basis, Delhi-NCR grew 49.9 percent, Bengaluru increased 31.1 percent, and Chennai expanded 37.7 percent. Premium office spaces such as BNP Paribas securing premium office space in BKC Mumbai reflected the strong demand in key locations.

India Positioned for Record-Breaking Year

With low vacancy rates, a robust leasing pipeline, and diversified sectoral demand, India's office market appeared poised to finish 2025 on a record-breaking note. Industry analysts believed the country's ability to attract global capital, absorb demand from tech and services sectors, and maintain steady office infrastructure development was positioning it as one of the world's most resilient and high-growth commercial real estate markets.

The momentum was further supported by corporate India's green revolution with carbon-neutral offices and the trend of flexible lease terms driving office space renewals. For investors looking to capitalize on this growth, understanding smart ideas to maximize real estate investment returns becomes crucial.