The office real estate industry in India has seen a remarkable performance during the period between July and September of 2025, and net leasing activity is growing by 35% over the course of the year across the nation's top 8 cities. According to real estate expert Cushman & Wakefield (C&W), the net absorption was 16.25 million square feet in the quarter, which reflects a heightened demand from both international and domestic businesses.
The increase in demand demonstrates the industry's resilience as new take-ups of space make up a large portion of leases, indicating growing corporate footprints and not simply renewals. According to industry experts, it is a sign of the market's transition into an obvious expansionary cycle, which is being fueled by the scale into Global Capability Centers (GCCs) and the rise in startup activity and a surge in engineering and manufacturing investment.
The Delhi-NCR region has seen strong gains, Chennai, and Pune
Of all the cities in the region, Delhi-NCR, Chennai, and Pune have had the best performances. In Delhi, net leases have more than tripled to 3.79 million sq ft, compared with 1.52 million sq ft in the same time frame in the previous year. Chennai witnessed a tenfold rise to 2.28 million sq feet from less than 0.47 million sq feet during the prior year's July-September quarter. Pune also saw significant growth as leasing volumes grew 64 percent up to 2.54 million sq feet, in comparison to 1.55 million sq feet.
Hyderabad has also seen steady growth in net leasing, reaching 1.42 million sq ft, which is a 7% rise over the previous calendar year's 1.32 million sq ft. Kolkata expanded modestly to 0.43 million sq feet from 0.37 million sq feet, while Ahmedabad increased marginally by 0.21 million square feet, up from 0.20 million sq feet.
These developments signal not just an increase in demand but also a growing confidence among occupiers in areas previously thought of as less important than Bengaluru or Mumbai. The industry watchers have noted that occupiers are diversifying their operations across multiple cities, as they focus on the continuity of their business, cost reduction, and access to broader potential talent pools.
Declines in Mumbai and Bengaluru
In contrast, India's traditional front-runners--Bengaluru and Mumbai--saw declines in net absorption. Bengaluru's office demand fell 14%, dropping to 3.46 million square feet, compared to 4.01 million square feet during the corresponding timeframe in the previous year. Mumbai saw a much more dramatic decline of 19% falling to 2.13 million sq ft, down from 2.64 million sq ft.
Market analysts attribute this decline to a combination of high base levels, the limited supply of prime locations, and the cautious take-up of space by a few financial and technology services companies in the face of global economic challenges. Despite the downturn in the fourth quarter, however, both cities continue to draw a large number of occupiers because they have well-established hubs for commercial activity as well as infrastructures for talent.
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Expert insight
Anshul Jain, Chief Executive of India, SEA & APAC Office and Retail at Cushman & Wakefield, highlighted the structural strength that is driving the market's growth. "Over 80 per cent of Q3 leasing was driven by fresh take-up--a clear sign of occupiers growing their footprint, not merely renewing space," Jain declared. Jain added that the long-term economic fundamentals are solid and are supported by GCC expansions, more startup activity, and an increase in the engineering and manufacturing sectors, driving demand.
Veera Babu, Executive Managing Director Tenant Representation - India at C&W, emphasized that net absorption is a reliable gauge of demand. "This quarter's figures show that the momentum in the office sector in India is extensive and lasting. Cities like Delhi-NCR, Pune, and Chennai set new standards for leasing," Babu said. Babu was also adamant that a large pipeline of deals that are active indicates this could be part of a long-term structural expansion cycle and not an isolated event.
The outlook for the sector
Analysts from the industry expect leasing momentum to grow in the next quarters as India strengthens its position as a popular business location. With multinational companies expanding their GCC operations, local firms expanding, and new businesses looking to expand their workspaces, the demand is likely to continue rising. Policies aimed at attracting investment and simplifying business operations are likely to help the market for office real estate.
While the slowdown within Mumbai and Bengaluru might continue to persist in the near term Analysts believe they are likely to recover their strength thanks to their well-established business environment. In the end, the outlook for the office sector in India is positive, with a large-scale expansion underway in many cities.
The July-September figures for leasing confirm that India's office real property is now entering a new era of expansion in its structure, setting the conditions for long-term optimism among the tenants and a multi-city diversification. With 16.25 million square feet, this quarter is one of the best results in recent years, which highlights the market's resilience and potential for the long term.
Source: Business World
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