India's Office Real Estate: A Steady Momentum Amid Dynamic Demand

In the third quarter of 2025, the demand for office space in most Indian cities outstripped new supply, yet vacancy levels remained stable due to tenant relocations and churn. At the national level, vacancies held firm at 16.4%, despite Pune and Delhi-NCR experiencing over a 100 basis points increase in vacancy rates due to new office completions, as reported by real estate consultancy firm Colliers.

Average rental rates rose across major cities, supported by robust demand-supply dynamics, signaling sustained confidence among occupiers. Leasing activity within India's top seven office markets remained strong during the first three quarters of 2025, with space uptake reaching 50.9 million square feet, marking an 8% year-on-year growth. However, quarterly leasing dipped slightly to 17.2 million square feet in Q3 2025, according to the report.

Bengaluru continued to lead transaction volumes in the third quarter, while Pune, Mumbai, and Chennai saw significant demand traction, collectively accounting for over half of the quarterly Grade A office space uptake. Each city recorded at least a 40% year-on-year demand growth in Q3 2025. Bengaluru maintained its dominance in nine-month space uptake with 14 million square feet of leasing, representing 27% of the total office space demand in India.