Hyderabad, Jan 7 (.) : India’s commercial real estate market delivered a standout performance in 2025, emerging as one of the strongest office markets globally as leasing activity surged to an all-time high of 86.4 million sq ft, according to its flagship report – India real estate office and residential market (H2 2025) released by Knight Frank India.
The annual absorption marked a 20 per cent year-on-year increase, surpassing the previous peak of 2024 and standing 43 per cent higher than pre-pandemic levels of 2019, underlining a structural shift in global occupier confidence toward India, the report revealed.
Global Capability Centres (GCCs) remained the primary growth engine, accounting for 38 per cent of total leasing at 31.8 million sq ft, as multinational corporations expanded high-value operations in areas such as R&D, engineering, analytics and AI.
Flexible workspace operators followed closely, leasing 18.6 million sq ft, their highest-ever annual absorption, while third-party IT services staged a strong comeback, nearly doubling volumes year-on-year to 15.3 million sq ft.
Bengaluru consolidated its position as India’s largest office market, recording a historic 28 million sq ft of leasing, driven largely by GCC demand.
Hyderabad, NCR, Pune and Chennai each crossed the 10 million sq ft mark, highlighting the breadth of demand across major metros. Mumbai, at 9.8 million sq ft, narrowly missed the milestone, the report said.
Despite robust demand, new office completions lagged at 54.8 million sq ft, growing only 9 per cent YoY, leading to tighter availability and firmer rentals.
Rents rose across all key markets, led by NCR and Hyderabad with 10 per cent growth, followed by Mumbai and Bengaluru at 6 per cent, reflecting a clear shift in pricing power toward landlords.
Occupiers showed a strong preference for Grade A assets, which accounted for over 90 per cent of total leasing, while average deal sizes increased 22 percent YoY, signalling longer-term commitments and confidence in India’s business outlook.
Commenting on the pan-India performance, Shishir Baijal, International Partner, Chairman and Managing Director, said,India’s office market is increasingly insulated from global volatility, supported by stable regulations, a deep talent pool and sustained GCC expansion.With limited supply additions and rising demand for high-quality space, the sector enters 2026 on a strong footing, positioning India as a key global destination for commercial real estate investment and corporate expansion.
. KNR PRP