• Pan-India weighted average rentals climbed to ₹90.7 per sq ft per month, with market rent premium expanding to 19% over passing rent
  • 28.8 million square feet of new office stock added in H1 CY’25; Pune contributed nearly 30% of new supply
  • Highest demand in the IT/ITES segment generated from Bengaluru (30%) and Delhi NCR (44%)

National : The Confederation of Real Estate Developers’ Associations of India (CREDAI), in collaboration with real estate data intelligence leader CRE Matrix, has released its India Office Market Report for Q2 CY’25, revealing sustained momentum across India’s commercial real estate landscape. The report highlights the market’s structural strength with vacancy rates declining by 210 basis points (BPS) between CY’24 and CY’25, underpinned by robust demand of 34.5 million square feet in H1 CY’25 and consistent absorption across major business hubs.

The Indian office market’s resilience is anchored by a balanced demand-supply ratio of 1.3X over the last six quarters, reflecting the continued confidence of occupiers and the strategic expansion of Global Capability Centres (GCCs). The ongoing shift towards flexible work models and strong domestic demand are also driving robust absorption rates across Bengaluru, Mumbai Metropolitan Region (MMR), Delhi-NCR, and Hyderabad. The office market absorbed 17.3 million square feet of fresh space during Q2 CY’25.

The report illustrates diversified occupier demand across sectors, with IT/ITeS leading at 24% contribution, followed by BFSI at 20% and co-working spaces at 19%. Hyderabad has emerged as the premier co-working destination, contributing 29% to the sector’s demand in Q2 2025. With this, Hyderabad is well-positioned to surpass the Mumbai Metropolitan Region in total office stock by the next quarter, reinforcing both markets’ emergence as India’s key supply powerhouses.

From a supply perspective, emerging markets demonstrated significant momentum, with Pune and Hyderabad collectively contributing 54% of total office supply in Q2 2025. Simultaneously, Pune and Bengaluru accounted for 40% of aggregate demand during the corresponding period, reinforcing their positions as key absorption centres in the commercial real estate landscape.

According to the report, 28.8 million square feet of new office stock was added in H1 CY’25, with Pune contributing nearly 30% of new supply during the period. The geographic diversification of supply reflects the market’s maturation beyond traditional metros and the growing acceptance of non-metros and Tier-2 cities as viable business destinations.

Delhi-NCR continued to demonstrate healthy growth momentum in Q2 CY’25, reaffirming its position as one of the country’s most dynamic office markets. The region recorded 4.9 million sq ft demand in H1 CY’25, marking a robust 23% quarter-on-quarter growth. The momentum was driven by strong uptake from BFSI, professional services, and healthcare occupiers. Despite maintaining a relatively high vacancy of 20.8%, leasing activity in key hubs such as Gurgaon and Noida remained steady, with large occupiers continuing to commit to Grade A spaces, reflecting the region’s enduring appeal as a strategic business destination.

Ahmedabad, while witnessing a moderation in activity, remains on a steady growth path backed by upcoming supply and the rising prominence of GIFT City. The city witnessed 0.5 million sq ft demand in H1 CY’25, with activity moderating compared to the previous year. While demand and supply saw a temporary dip, Ahmedabad continues to hold long-term promise with 19.6% vacancy and a strong 9.7 million sq ft pipeline of upcoming Grade A supply till 2030. With GIFT City emerging as a magnet for BFSI and IT players, the city is steadily positioning itself as a promising alternative hub for occupiers seeking growth beyond the traditional metros.

Shekhar Patel, President, CREDAI, said, “India’s office market is entering a new era of maturity and expansion. What’s most striking is that growth is no longer confined to traditional metros emerging cities are steadily becoming integral to the country’s office landscape. The diversification across sectors, from BFSI and co-working to new-age industries, underlines the depth and resilience of this transformation. As demand broadens and the market rent premium strengthens, we are witnessing the foundation of a structurally strong and future-ready office ecosystem that will power India’s journey toward becoming a $30 trillion economy.”

Abhishek Kiran Gupta, CEO & Co-Founder of CRE Matrix, said “India’s office market continues to demonstrate remarkable resilience. Strong domestic occupier activity, ongoing GCC expansion, and the rapid rise of co-working—particularly in Hyderabad—have sustained robust absorption levels. With the demand-to-supply ratio holding steady at 1.2X and pan-India rentals climbing to ₹90 per sq. ft per month—up nearly 5% in just one quarter—India has firmly cemented its position as a landlord’s market. The fact that Hyderabad is set to overtake MMR in office stock underlines the structural depth of Indian office real estate and its ability to attract both global and domestic occupiers even amid significant new supply.”

Despite significant new supply additions, the demand-to-supply balance remained favourable, resulting in further compression of vacancy levels across prime hubs, including Bengaluru, Chennai, and MMR. Pan-India weighted average rentals climbed to ₹90.7 per square foot per month, reflecting healthy annualised growth of 4.7% in Q2 CY’25 compared to Q1 CY’25.

As per the report, the outlook for the remainder of 2025 remains robust, supported by a strong pipeline of quality supply scheduled across Tier-1 cities. Healthy levels of pre-commitment leasing, combined with compressed vacancy rates, are expected to provide stability and ensure sustained market momentum. The market’s ability to absorb significant new supply while maintaining rental growth and vacancy compression positions India’s office sector for continued strength in the evolving global business landscape.