India’s Real Estate Momentum in 2025: Record Office Leasing Signals Growth While Housing Market Holds Steady

India’s Real Estate Momentum in 2025: Record Office Leasing Signals Growth While Housing Market Holds Steady

In 2025, India’s real estate story was defined by a remarkable resurgence in office leasing that not only rewrote records but also reflected the country’s growing stature as a preferred global business destination. According to a comprehensive report by Knight Frank India, the nation’s office real estate market achieved an extraordinary milestone, with annual gross leasing volumes surging to an unprecedented 86.4 million square feet, representing a robust 20 percent year-on-year increase over 2024 and a striking 43 percent above the pre-pandemic peak of 2019.

This upswing in demand was not confined to a single region but spanned across multiple metros, with Bengaluru emerging as the largest office market in the country. The city alone accounted for 28.7 million square feet of leased space, underscoring its sustained appeal to multinational corporations and growing technology, financial, and services sectors. Other major markets like Hyderabad, Delhi-NCR, Pune, and Chennai each contributed significantly to the leasing momentum, with annual take-ups surpassing 10 million square feet.

The dynamics driving this surge were multifaceted. At the forefront was the expanding footprint of Global Capability Centres (GCCs), which collectively made up around 38 percent of total absorption. GCCs, which are international companies’ strategic hubs for innovation, analytics, and back-end functions, are increasingly choosing India not just for cost advantages, but for access to a deep talent pool and competitive ecosystems, reinforcing the country’s position on the global map.

Alongside GCCs, third-party IT services firms staged a notable comeback, contributing around 20 percent of leased space—almost doubling their share compared to the prior year—with an impressive rebound in demand. Flexible workspace operators also left their mark, leasing a record 18.6 million square feet, a sign that hybrid and modular work arrangements are gaining real traction as companies rethink how their teams collaborate in an evolving work environment.

Rentals across India’s office markets mirrored this heightened activity, with average rents increasing between 1 percent and 16 percent year-on-year in the second half of 2025. Cities such as Kolkata, which posted double-digit rental growth, and others like Delhi-NCR and Hyderabad, saw significant upticks in rental values, reflecting tightening markets and sustained occupier confidence.

While office real estate flourished, the residential market presented a picture of measured stability. Across the eight major cities tracked by Knight Frank India, residential sales remained broadly steady at 348,204 units, dipping slightly by about 1 percent compared to the previous year. New launches followed a similar trend with 362,184 units coming to market, down around 3 percent, pointing to a market that is normalizing after several years of heightened activity. Mumbai led residential sales, accounting for nearly 29 percent of all units sold, underscoring its enduring appeal despite broader market shifts.

This stability in housing was mirrored in other industry reports, which showed that premium homes priced at ₹1 crore and above dominated sales in 2025, indicating a shift towards higher-value segments even as the overall market steadied. Affordability remained a key theme, and inventory levels stayed comfortable across most major cities—suggesting a balanced supply-demand equilibrium heading into 2026.

Together, these trends paint a picture of a real estate landscape that is not only growing but also maturing. The office sector’s record performance highlights India’s competitive edge in attracting corporate commitments and global investments, while the broader residential market’s steadiness reflects enduring demand from homebuyers navigating evolving economic conditions. As businesses expand and adapt, and as more professionals seek quality living spaces, both segments are poised for continued resilience and transformation in the years ahead.