Office Rentals Rise 6% Across Top 7 Cities in 2025; Vacancy Eases to 16.2%, Pune Leads Absorption Growth

India’s commercial office market maintained its growth momentum through the first nine months of 2025, with rentals and leasing activity recording healthy gains across major cities, according to new data from ANAROCK Research & Advisory.

Average monthly office rentals in the top seven cities rose by 6% year-on-year — from ₹85 per sq. ft. in 9M 2024 to ₹90 per sq. ft. in 9M 2025. Bengaluru led the surge with a 9% annual increase, reaffirming its position as the country’s strongest office market.

Even as new completions climbed by 15% to 39.2 million sq. ft., the average vacancy rate dipped slightly from 16.7% to 16.2%, underscoring resilient demand. Chennai remained the tightest market with just 8.9% vacancy, while Hyderabad continued to report the highest vacancy levels at 26.5%.

Also Read: India’s Housing Market 2025: Why Gen Z Is Renting, Gen X Is Buying, And Millennials Wait | Republic World

Net office absorption hit a record 42 million sq. ft., marking a 34% jump over the same period last year and nearly 30% higher than 2019 levels. Among individual markets, Pune emerged as the standout performer with a 97% increase in net absorption, rising from 3.14 million sq. ft. in 2024 to around 6.2 million sq. ft. this year. Bengaluru continued to command the largest share, clocking nearly 10 million sq. ft. of leasing activity.

“Multiple factors are driving sustained office space demand despite global headwinds,” said Anuj Puri, Chairman, ANAROCK Group. “Global Capability Centres (GCCs) have been major demand drivers — accounting for over 40% of gross office leasing during the period.”

Sector-wise, IT/ITeS continued to lead with a 27% share of total leasing, followed by coworking spaces (23%) and BFSI (18%). The growing popularity of flexible workspaces reflects the shift toward hybrid work models and cost-efficient leasing strategies.

With India’s expanding economy, talent pool, and preference for Grade-A sustainable offices, analysts expect leasing momentum to stay strong into 2026 — even as developers ramp up new, high-quality office supply to meet evolving corporate demand.