Pune office market records robust activity with 9.9 million sq ft fresh supply in FY2025: ICRA
Pune’s office market has recorded significant activity, with 9.9 million square feet (msf) of fresh Grade-A office supply in FY2025 and 4.4 msf in Q1 FY2026, against a net absorption of 7.7 msf and 2.5 msf, according to ICRA Limited, one of India’s leading credit rating agencies.
ICRA said the absorption was driven by strong demand from the engineering and manufacturing and IT-BPM sectors.
As supply outpaced net absorption, occupancy declined by 180 basis points to 84.2 per cent by June 2025 from 86 per cent in March 2024. Despite an expected high supply of around 9.5 msf in FY2026, occupancy is projected to remain steady between 85.0 and 85.5 per cent by March 2026, supported by continued leasing momentum.
As of June 30, 2025, Pune accounted for 11.7 per cent, or approximately 120 msf, of the Grade-A office space across India’s top six cities (Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune).
Within Pune, the Northwest and Northeast regions together hold 82 per cent of the city’s Grade-A office stock. The micro-markets of Kharadi, Hinjewadi, and Viman Nagar are the top contributors, representing 43 per cent of Pune’s total office supply.
In FY2026, vacancy in Hinjewadi is expected to decline due to limited upcoming supply and strong net absorption, while vacancy levels in Kharadi and Viman Nagar are expected to remain steady. The top 10 developers in Pune collectively hold 51 per cent of the city’s Grade-A office stock, with seven of them maintaining occupancy above 90 per cent.
Rental rates across key micro-markets—Hinjewadi, Viman Nagar, and Yerawada—have grown at a compound annual growth rate (CAGR) of around 3–4 per cent, and Kharadi at 4–5 per cent between FY2020 and FY2025. The citywide average rental rate is projected to rise by 3–4 per cent in FY2026.
Between FY2017 and FY2025, Pune’s office market stock recorded a CAGR of approximately 7 per cent, in line with the growth rate of India’s top six cities. As of June 30, 2025, Pune contributed around 11.7 per cent of the total office supply of the top six cities, up from 10.4 per cent as of March 31, 2022. ICRA projects this share to remain steady in FY2026.
Published on October 6, 2025
