Bengaluru, NCR, and Mumbai drive India’s office demand as absorption almost touches 20 mn sq ft in Q3 2025
India’s office real estate sector recorded 19.69 million sq ft of absorption in Q3 2025, a 6% year-on-year and 5% quarter-on-quarter rise, according to a report by Vestian. The demand was led by Bengaluru, National Capital Region (NCR), and Mumbai, driven largely by expansions of Global Capability Centres (GCCs), the growing footprint of BFSI firms, and increased take-up by flexible workspace operators as occupiers continue to adopt hybrid models.
Bengaluru topped the charts with 4.63 million sq ft. NCR followed closely at 4.01 million sq ft, supported by sustained leasing in Gurugram and Noida, while Mumbai recorded 2.98 million sq ft, led by banks, financial services, and co-working operators seeking prime corporate space, the report said.
Kolkata remained the smallest office market at 0.42 million sq ft, but posted significant growth of 21% quarter-on-quarter and 285% year-on-year, largely due to a low base and a revival in occupier interest.
“This marked the second-highest absorption level recorded, following the peak of 21.62 million sq ft in Q4 2024. Southern cities provided the thrust for this growth, with Bengaluru, Chennai, and Hyderabad together accounting for 50% of the pan-India absorption in Q3 2025,” the report said.
Also Read: India records 57 mn sq ft of office space absorption between Jan-Sept 2025: Savills India report
IT softens, BFSI and flex spaces rise
The Vestian report said that the IT-ITeS sector continued to be the largest occupier, accounting for 31% of the total absorption. However, its share declined from almost 50% in the previous quarter as large tech firms moderated expansion.
The BFSI sector doubled its share to 15% in Q3 2025, while flexible workspace operators contributed 14%, highlighting continued preference for hybrid work models and agile real estate planning.
Shrinivas Rao, CEO of Vestian, noted that, despite global layoffs and technology spending rationalization, domestic demand and Global Capability Centre (GCC) expansions are supporting leasing activity.
“The third quarter of 2025 reported the highest absorption of the current year, primarily driven by GCCs. This robust demand kept the office market buoyant amid global trade uncertainties and geopolitical tensions. Construction activity also gained momentum, with significant supply additions across the key markets. Robust absorption, healthy supply, and a diversified occupier base are expected to drive the next wave of growth in the coming quarters. H-1B visa restrictions may further amplify the demand for offices in India as more and more GCCs expand their footprint in India,” he said.
Also Read: India’s office space absorption up 34% to 42 mn sq ft; Bengaluru leads with 9.95 mn sq ft
New supply picks up across metros
The report said that new Grade A supply also saw a surge, with 16.1 million sq ft completed in Q3 2025, a 26% higher year-on-year and 10% above the previous quarter.
Pune led new supply additions with 3.70 million sq ft, followed by Bengaluru with 3.40 million sq ft and NCR with 3.10 million sq ft. Chennai completed 2.10 million sq ft, marking its highest supply in seven quarters and a 320% year-on-year increase. Developers accelerated project completions in response to sustained demand and stable pre-commitment levels across large business districts, the report said.
Rao said the market outlook remains constructive, supported by expansion from consulting, financial services, R&D, GCCs, and flexible workspace operators. He expects Bengaluru, Hyderabad, and Pune to continue driving leasing momentum in the coming quarters, with absorption projected to remain steady even amid a cautious global business environment.
