India's Office Market Soars in Q3 2025: A Deep Dive into the Numbers
India's office sector is on fire! According to Cushman & Wakefield's Q3 2025 report, the market has achieved an impressive 35% year-over-year growth in net absorption, reaching 16.3 million square feet across the top 8 cities. But what does this mean for the industry?
Net absorption, a critical metric for real estate demand, reveals the change in occupied office space. With nearly 87% of the full-year total already achieved in the first three quarters, the market is on the cusp of surpassing 2024's record. And this is where it gets exciting: with one quarter remaining and a robust pipeline of deals, 2025 is poised to set a new benchmark.
Let's break down the city-level performance:
- Delhi NCR and Bengaluru take the lead, contributing 23% and 21% of total net absorption, respectively. A remarkable feat!
- Mumbai, Chennai, and Pune also shine, surpassing their year-to-date net absorption levels from 2024. Chennai and Pune's highest-ever YTD net absorption is a testament to their growing appeal.
But here's where it gets controversial... While some cities thrive, others experience a decline. Mumbai, Delhi NCR, and Bengaluru witness a quarterly dip in net absorption, yet their year-over-year growth remains impressive.
Leasing Activity and Sectoral Insights:
Gross Leasing Volume (GLV) in Q3 reached 22.6 msf, a slight decline year-on-year, but with one quarter left, 2025 is on track to match or exceed 2024's record. Fresh leasing dominates, indicating a 21% quarter-on-quarter increase and occupiers' expansion despite global uncertainties.
The top cities for leasing in Q3:
- Delhi NCR, Bengaluru, and Mumbai lead the way, accounting for over 60% of leasing activity. Delhi NCR's six-year high is a notable achievement.
- Chennai, Hyderabad, Pune, Kolkata, and Ahmedabad follow, showcasing a diverse range of leasing destinations.
Sectoral demand reveals interesting trends:
- IT-BPM takes the lion's share with 31%, followed by Engineering & Manufacturing (18%) and BFSI (14%).
- Flexible workspace operators play a significant role, contributing 11% to office leasing.
Supply-side dynamics:
- New completions in Q3 totaled 14.1 msf, with ~80% being Grade-A+, highlighting occupiers' preference for high-quality, ESG-compliant spaces.
- Bengaluru and Delhi NCR lead the way, reinforcing their status as premium office space hubs.
Market Trends and Expert Insights:
- Pan-India vacancy declined by 53 basis points to 14.81%, a consistent trend for nine quarters.
- Rental growth across major cities is supported by strong demand and premium supply, with Mumbai and Hyderabad leading the charge.
Anshul Jain, Chief Executive, Cushman & Wakefield, emphasizes the market's structural strength and occupiers' strategic decisions, positioning India as a core market for global operations. Veera Babu, Executive Managing Director, highlights the widespread and sustained momentum in the office sector, with occupiers making forward-thinking choices and prioritizing quality.
The big question: Is this growth a temporary spike or a long-term structural shift? Share your thoughts in the comments below! Are we witnessing a new era for India's office market, or is this just a fleeting boom?
