India on track to become the world’s fourth largest office market as commercial stock nears 1 bn sq ft: Knight Frank

Bengaluru, NCR, and MMR together account for 60% of India’s total office stock, while Hyderabad, Pune, and Chennai contribute another 33%. The remaining 7% is concentrated in Ahmedabad and Kolkata, highlighting the urban-centric nature of India’s office market expansion, the report said.

From under 200 million sq ft in 2005 to nearly 1 billion sq ft in 2025, India’s office market has grown at a compound annual growth rate (CAGR) of 8.6% over the past two decades. As of June 2025, India had already reached 993 million sq ft of total office stock, the report said.

“Milestones like the SEZ policy, regulatory improvements, and infrastructure investments have enabled the market to reach the 1 billion sq ft mark,” Knight Frank said.

Looking ahead, Knight Frank projects that India could add another 1 billion sq ft of office stock by 2036–2041, depending on economic momentum and real estate formalisation. “India is on the brink of a transformational decade in commercial real estate,” said Shishir Baijal, chairman and managing director, Knight Frank India. “This growth is being driven by world-class developers, global capital flows, and a digital, urban workforce that continues to expand.”

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Bengaluru leads, followed by NCR and Mumbai

India’s top three markets, Bengaluru, NCR, and Mumbai, together account for nearly 60% of the country’s total office stock. Bengaluru leads the pack with 229 million sq ft (23%), followed by the National Capital Region (NCR) with 199 million sq ft (20%), and Mumbai Metropolitan Region (MMR) with 169 million sq ft (17%).

Cities like Hyderabad (123 million sq ft), Pune (106 million sq ft), and Chennai (92 million sq ft) are also major contributors, collectively making up another 33%. The remaining 7% comes from Ahmedabad and Kolkata, the report said.

Grade A offices comprise over half of India’s office stock

The report highlighted that Grade A office spaces now constitute 53% of the total stock, with the balance made up of Grade B (43%) and Grade C (4%) properties. Bengaluru stands out with 70% Grade A office stock, followed closely by Hyderabad (68%) and Chennai (64%), reflecting strong demand from tech and Global Capability Centres (GCCs).

“India’s office market is not just growing, it’s maturing and evolving,” said Gulam Zia, senior executive director at Knight Frank India. “Crossing the 1 billion sq ft threshold is a testament to our resilience and long-term economic fundamentals.”

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India’s sub-dollar rentals boost its appeal as a global office hub

According to Knight Frank India, average office rents in the country have declined to just $0.96 per sq ft per month in 2025, reinforcing India’s unique position as a ‘sub-dollar’ rental market.

“This affordability, when combined with rising Grade A supply and growing compliance with global ESG (Environmental, Social, Governance) standards, has made India increasingly attractive to multinational occupiers,” it said. The report highlighted how this cost-quality dynamic is fuelling the continued expansion of Global Capability Centres (GCCs) across Indian cities.

“India’s sub-dollar rental positioning is a powerful differentiator in the global office landscape,” said Viral Desai, senior executive director at Knight Frank India. “It validates India’s shift from volume-led growth to value-driven development. With occupiers prioritising ESG compliance, productivity, and location efficiency, India’s ability to offer tech-enabled, green-certified workspaces at low costs presents a compelling proposition for global enterprises.”