India’s office market recorded 74 percent increase in first quarter of 2025: report
According to a latest report released on Thursday by real estate firm Knight Frank India, India’s top eight office market saw a great increase in transactions, reaching 28.2 million sq ft in the first quarter of 2025, which is recorded in a quarter so far.
Inspired by strong economic speed, Occupier confidence brought the amount of transactions to new heights. The report states that this is a great growth of 74 percent on an annual basis, which is 48 percent more than the previous peak set in the third quarter of 2024.
Bengaluru led the office market expansion by registering 12.7 million sq ft transactions in the first quarter of 2025, which was 45 percent of the total office space acquisition. The office transaction in Bengaluru recorded a huge increase of 259 percent compared to the first quarter of 2024. 58 percent or 0.7 million square meters (7.4 million square feet) part of the area transacted in Bengaluru was due to the first commitment.
Hyderabad maintained a steady speed and reached 4 million sq ft in the demand of the office. Pune also set a new quarter record in the amount of transactions with 3.7 million sq ft and Mumbai with 3.5 million sq ft. Bengaluru and Pune overtook the 74 percent of the national annual growth rate and emerged as the major volume driver of the office market of India.
The office transactions were mainly operated by the Global Capability Center (GCC), with 12.4 million sq ft transactions, which was 44 percent of the total market share. Third-party IT services with 5.5 million sq ft secured 19 percent market share, followed by flex operators with 5.5 million sq ft, who secured 20 percent market share.
Bengaluru dominated the amount of transactions in GCC and Third-Party IT services, where the city had 8 million square feet and 2.1 million sq ft transactions respectively. Pune secured a leading position in the Flex Space Transaction, where Flex operators performed 1.61 million sq ft transactions during the quarter.
Global Capability Centers played an important role in furthering India’s office market, which had a 44 percent stake in the total demand, with 12.4 million sq ft transactions. Bengaluru dominated by contributing about 8 million sq ft or 65 percent of all GCC transactions in the first quarter of 2025.
Shishir Baijal, president and managing director of Knight Frank India, said, “The first quarter of 2025 was a great time for the Indian office place market. The GCC demand is constantly touching the new level, which is strengthening India’s global perception as a long -term investment destination.” He said, “With continuous transaction delays since 2021, the level of vacancies declined from 17.2 percent to 14.3 percent in the first quarter of 2025. The fare has also increased since the beginning of 2022 due to a decrease in supply in top markets.” The report states that India is moving forward on development parameters, so the office location market is facing minimal challenges besides limited supply and it is in good condition to maintain its speed by 2025.
