India's Office Market Hits Record 71.5 Mn Sq Ft Leasing in 2025: Bengaluru Leads Amid Tech Surge and Rental Growth

Kritika Bhola
Dec 30, 2025
5 min read

India's Grade A office leasing market reached an all-time high of 71.5m sq ft in 2025, marking a 6% increase year-on-year across the top seven cities. The fourth quarter saw an unprecedented demand of over 20m sq ft, reflecting sustained occupier confidence amid GCC expansions and the growth of the technology sector. Bengaluru became the unquestionable leader, accounting for nearly one-third of total leasing activity.

Record-Breaking Leasing Volumes

Total Grade A office leasing crossed 71.5 million sq ft in 2025, touching the previous threshold for the first-ever down. The final quarter alone was an exceptional 20.6 million sq ft, up 20% MoM, on the back of big-ticket transactions and expansions. Conventional spaces accounted for 58.5 million sq ft (up 7% YoY), with flex spaces at 13 million sq ft indicating demand diversification.

Bengaluru stood tall at 22.1 million sq ft leased, accounting for about 31% of national activity and its highest quarterly number of 8.1 million sq ft in Q4. Delhi NCR came in second at around 10-13% share with 4.2 million sq ft in Q4, while Hyderabad, Chennai, and Mumbai contributed 13-16% on an annual basis each. This multi-market spread indicates the occupier's intention for geographic diversification and operational resilience.

Key Demand Drivers

Helped by agreements, heavy sector absorption was seen from these technocrats, as 37%-40% of conventional leasing took place in the flex space with large deals contributing to two-thirds of Q4 activity. The GCCs, BFSI, and engineering industries closely followed, making the most of India's talent-cost equation. As these flex operators started to expand, their share of demand would also considerably increase from 5% in 2022 to 20% in 2026, especially in large Tier II cities.

There appeared to be a distinct flight-to-quality trend prevailing, whereby occupiers now favor Grade A buildings that are sustainable and have great amenities. The Q4 momentum was primarily because of year-end closures in companies like tech and GCCs which uplifted confidence, although it remains vulnerable to greater global uncertainty. In Bangalore, Login Realty's clients face a growing level of competition for premium ORR and Whitefield spaces, with the metro expansion adding to the attractiveness.

Supply Dynamics and Vacancy Trends

The 2023-Q3 continued with moderate new supply of 56.5 million sq ft across major cities; it is up by 5 per cent YoY, mainly led by Bengaluru, Hyderabad and Pune, accounting for nearly 70 per cent of the additions. Fourth-quarter supply tapered down to 15.1 million sq ft (down 6% YoY), creating a favorable imbalance in demand and supply. Vacancies declined by 49 basis points nationally, with sharper dips in key markets, namely Bengaluru (220 basis points in earlier quarters).

This tightening translated to a rental appreciation of close to 15% YoY in major cities, with firming rentals in prime corridors such as ORR in Bengaluru. Login Realty's portfolio of assets in these high-demand micros such as Electronic City and Hoodi justifies rental upswings for investors in the face of limiting new completions. Stable supply pipelines ensure a balanced environment for growth without fears of oversupply.

Bengaluru's Dominant Performance

Bengaluru leases at 22.1 million sq ft, Q4 being a record 8.1 million sq ft, with Delhi NCR at 4.2 million sq ft for 60% of quarterly total. Factors driving leasing include tech giants and GCCs targeting ORR (Embassy Tech Village deals) and SBD areas such as Koramangala. Metro Phase 3 expansions added to the demand in Whitefield and Electronic City, where connectivity contributes a 25-30% premium onto valuations.

Vacant space was absorbed fast, with a sharp drop in vacancy rates. Average rentals rose by 3% y-o-y in Q1 and beyond till the end of the year. For Login Realty, this year presented opportunities in managed flex spaces and sustainable retrofits, keeping in view occupier preferences for ESG-compliant assets. Pune and Chennai also had their moments, with double the leasing in some quarters, but the scale of Bengaluru sets a national pace.

Sectoral Insights and Flex Space Boom

Technology dominated at over 40% of Q4 conventional demand (7 million sq ft), with flex adding buoyancy via 2.2 million sq ft in Q1 alone. GCCs and BFSI fueled multi-city expansions, while engineering/manufacturing grew steadily. Flex spaces hit 13 million sq ft annually, with operators eyeing Tier II ramp-ups for 20% future share.

This shift favors hybrid models, where Login Realty's flexible leasing options in Bangalore cater to startups and scale-ups seeking agility. Sustainability traction rose, with green-certified buildings commanding premiums amid ESG mandates. Overall, diversified sectoral pull mitigates risks from any single industry slowdown.

Rental and Investment Implications

Rents firmed 15% YoY across markets, driven by vacancy compression and quality flight. Bengaluru's WAQ rents averaged higher in ORR (INR 140+ psf/month), with Gurugram and Noida also seeing uplifts. Investors benefit from cap rate compression in prime assets, signaling strong NOI growth.

For Login Realty stakeholders, Q4's large deals highlight pre-leasing potential in upcoming supply. RERA compliance and asset management services become critical for yield optimization in this low-vacancy environment. Returns remain attractive versus global peers, bolstered by India's 7-8% GDP trajectory.

2026 Market Outlook

Leasing activity projects robustness into 2026, supported by GCC scale-ups, tech/BFSI demand, and flex adoption. Demand for sustainable buildings and managed spaces will intensify, with Tier II traction rising. Supply moderation keeps vacancies low, sustaining rental momentum.

Login Realty anticipates 10-15% leasing growth in Bangalore portfolios, leveraging metro-driven micros and flex integrations. Risks like geopolitical shifts remain, but structural tailwinds dominate. Occupiers prioritizing quality assets will thrive.

Strategic Recommendations for Investors

Focus on ORR, Whitefield, and Electronic City for immediate leasing velocity, given Q4 precedents. Integrate flex pods (20-30% allocation) to capture hybrid demand and reduce vacancy risks. Emphasize ESG retrofits for 10-15% rental premiums and RERA-aligned tenancies.

Partner with platforms like Login Realty for data-driven matchmaking, ensuring quick absorptions amid tightening supply. Monitor GCC expansions for pre-commitment opportunities in 15-20 million sq ft annual pipelines. Diversify across conventional-flex hybrids for resilient portfolios.

Why Bangalore Leads the Charge

Bengaluru's 31% national share stems from tech ecosystem density and infrastructure upgrades like metro lines boosting accessibility. Q1 trends showed 28% leasing share, escalating to record Q4 highs. Vacancy declines and 3-15% rent hikes reflect unmatched occupier pull.

Login Realty's localized expertise positions it to broker high-value deals in these hotspots. Investors eyeing 2026 yields should prioritize Grade A completions here. Sustained policy support further cements its primacy.

Frequently Asked Questions (FAQs)

What was the total Grade A office leasing volume in India for 2025?
India's Grade A office leasing reached a record 71.5 million sq ft across top seven cities, marking a 6% YoY increase.
Which city led office leasing activity in 2025?
Bengaluru dominated with 22.1 million sq ft leased, capturing 31% of national volume and a record Q4 of 8.1 million sq ft.
What drove the strong Q4 2025 leasing surge?
Q4 recorded 20.6 million sq ft, up 20% sequentially, fueled by year-end large deals from tech firms and GCCs.
How did flex spaces perform in 2025?
Flex spaces accounted for 13 million sq ft, with operators expected to drive 20% of 2026 demand, especially in Tier II cities.
Which sectors were the top demand drivers?
Technology captured 37-40% of conventional leasing, followed by GCCs, BFSI, and engineering sectors.
What happened to vacancy rates and rentals in 2025?
National vacancies dropped 49 bps, spurring up to 15% YoY rental growth in major cities like Bengaluru.
How much new office supply was added in 2025?
New supply totaled 56.5 million sq ft, up 5% YoY, with Bengaluru, Hyderabad, and Pune leading at 70% of additions.
Why is Bengaluru the top office market?
Its tech ecosystem, metro expansions in ORR/Whitefield, and record absorption make it India's premier hub.
What is the outlook for office leasing in 2026?
Robust demand from GCCs, tech, and flex spaces persists, with supply moderation sustaining low vacancies and rental rises.
How can investors capitalize on these trends via Login Realty?
Target premium Bangalore micros like ORR/Electronic City for flex-integrated, ESG assets with pre-leasing potential.