India's Office Sector Growth in Q3 2025: A Deep Dive into the Market's Strength
India's office real estate market demonstrated remarkable resilience in Q3 2025, with net absorption soaring to 16.3 million square feet (msf) across the top 8 cities, according to Cushman & Wakefield's Q3 report. This represents a 35% year-on-year surge, highlighting the robust occupier activity and sustained expansion of office spaces across various sectors.
Net absorption, a key indicator of real estate demand, measures the net change in occupied office space. With 44.3 msf absorbed in the first nine months of 2025, the market is on track to surpass last year's record, potentially setting a new high for annual net absorption.
City-level performance showcases this momentum. Delhi NCR (3.8 msf) and Bengaluru (3.5 msf) led the quarter, contributing 23% and 21% of total net absorption, respectively. Mumbai (2.1 msf), Chennai (2.3 msf), and Pune (2.5 msf) also posted strong numbers, with all three cities surpassing their year-to-date (YTD) net absorption levels from the same period last year. Notably, Pune and Chennai achieved their highest-ever YTD net absorption, indicating the growing maturity and appeal of these markets for global and domestic occupiers.
Leasing Activity and Sectoral Trends
Gross Leasing Volume (GLV) stood at 22.6 msf in Q3, a slight 2.6% decline year-on-year, bringing YTD leasing to 64.2 msf— nearly two-thirds of the record 88 msf transacted in 2024. With one quarter remaining, 2025 is poised to match or exceed last year's benchmark.
Fresh leasing dominated the quarter, accounting for over 80% of total activity, with a 21% quarter-on-quarter increase and a slight year-on-year uptick, indicating continued expansion despite global uncertainties.
Global Capability Centres (GCCs) contributed 32% of Q3 leasing, marking a significant milestone, as their quarterly share crossed 30% for the second time in 2025, achieved only four times in the past seven years.
In terms of sectoral demand, IT-BPM remained the largest contributor, accounting for over 31% of leasing, followed by Engineering & Manufacturing (18%) and BFSI (14%). Flexible workspace operators continued to play a crucial role, accounting for 11% of leasing.
Supply Side Insights
14.1 msf of new completions entered the market in Q3, bringing year-to-date completions to approximately 37 msf. Interestingly, nearly 80% of this supply was Grade-A+, reflecting occupiers' growing preference for high-quality, ESG-compliant assets.
Bengaluru and Delhi NCR together contributed close to half of the quarter's new completions, reinforcing their status as leading destinations for premium office space.
Vacancy Reduction and Rental Growth
Strong absorption and controlled supply led to a 53 basis point decline in pan-India vacancy, now at 14.81%, marking nine consecutive quarters of vacancy reduction.
Rental growth was observed across all major cities, supported by healthy demand and premium supply. Mumbai and Hyderabad led with 15–17% year-on-year growth, while Ahmedabad, Delhi NCR, and Chennai posted gains in the 6–10% range.
Expert Insights
Anshul Jain, Chief Executive – India, SEA & APAC Office and Retail, Cushman & Wakefield, emphasized the structural strength of India's office sector, noting that over 80% of Q3 leasing was driven by fresh take-up, indicating occupiers' expansion plans rather than just renewals. He highlighted the preference for high-quality, future-ready workspaces, with nearly 80% of Q3 completions being Grade-A+ assets.
Veera Babu, Executive Managing Director, Tenant Representation - India, Cushman & Wakefield, underscored the widespread and sustained momentum in India's office sector, with cities like Delhi NCR, Pune, and Chennai setting new leasing and absorption benchmarks. The active deal pipeline suggests a deeper, more structural growth cycle, with diverse occupiers making forward-looking decisions and prioritizing quality.
