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India’s Office Rental Market Is Surging in 2025 – What the CPRI Q4 Report Reveals

IIMB-CRE Matrix CPRI for Offices

India’s Office Rental Market in 2025 stays resilient as businesses expand in major cities. The Commercial Property Rental Index (CPRI) Q4 Report from IIMB-CRE Matrix offers data-driven insights into Grade A office rental changes across key areas.

For instance, the Q4 2025 study shows steady growth in India’s Office Rental Market in 2025. It highlights strong momentum in select cities and emerging micro-markets shaping commercial real estate.

The IIMB-CRE Matrix, from the Indian Institute of Management Bangalore and CRE Matrix, boosts transparency and data insights in India’s commercial real estate market.

India’s Office Rental Market Shows Steady Growth

The most recent research shows stable and consistent rental growth in India’s top office markets.

The key national indicators are:

  • 3.0% year-over-year rental growth
  • CAGR: 5.2% over three years
  • CAGR: 4.2% over five years
  • 4.4% ten-year CAGR

This steady performance shows strong demand. It comes from key sectors like technology, financial services, consulting, and global capability centers (GCCs).

How Do Major Indian Cities Perform in the Office Rental Market?

Mumbai
Mumbai leads office rental growth with a 10% three-year CAGR and 13.4% YoY rise, driven by strong demand and limited Grade A/A+ supply in prime business districts.

Gurugram
Gurugram’s office market shows strong momentum with 12.9% YoY growth and 8.7% three-year CAGR, supported by MNC leasing and growth along Sohna Road.

Bengaluru
Bengaluru records the highest CPRI score of 207, with tech firms and GCCs driving demand in Whitefield and Outer Ring Road office corridors.

Hyderabad
Hyderabad’s office rentals remain stable with 0.6% YoY growth and 3.9% three-year CAGR, led by demand in HITEC City and Gachibowli.

Pune
Pune’s Grade A/A+ office market grew 0.9% YoY with a 5.2% three-year CAGR, supported by strong IT demand in Hinjewadi.

Chennai
Chennai saw rentals drop 17.5% year on year. It also had a 3.2% fall over three years. However, quarterly growth in areas like the Northern Suburbs shows local demand bouncing back.

Noida
Noida’s rental index fell 4.4% year on year. But it kept a 4.1% growth rate over three years. Leasing along the Greater Noida Expressway still drives its commercial growth.

Navi Mumbai
Navi Mumbai shows mixed trends. Rentals dropped 3.4% year on year. Yet it gained 5.7% over three years. In fact, the city had the biggest rank jump among major markets.

Delhi
Delhi office rentals rose 11.2% YoY with a 6.8% three-year CAGR, driven by demand in established CBD locations.

Thane
Thane saw 9.1% YoY rental growth and 5.5% three-year CAGR, supported by infrastructure upgrades and competitive rents near Mumbai.

Mumbai Leads Office Rental Growth 

Among India’s major office markets, Mumbai has emerged as the fastest-growing city for office rentals. For instance, the report shows its highest 3-year CAGR of 10.0%. This highlights strong, consistent growth across its office corridors. Moreover, Mumbai led quarter-on-quarter growth in Q4 2025, with rents up 2.8%. As a result, this reflects robust occupier demand and steady leasing in prime locations.

Gurugram Continues to Show Strong Momentum 

For example, Gurugram ranks among India’s most dynamic office markets. This stems from multinational corporations, global capability centers, and a growing financial and consulting ecosystem. Moreover, the report shows 12.9% year-on-year rental growth. As such, it stands as one of the country’s top performers. In turn, this signals strong leasing demand across the city.

Bengaluru remains India’s largest office market

While Mumbai leads in rental growth, Bengaluru continues to dominate the total market. The city had the highest CPRI index rating of 207, indicating the size and depth of its office market.

Bengaluru’s leadership is bolstered by its status as India’s technological hub, with a high concentration of global capability centers, technology businesses, and startups that continue to fuel office demand.

Emerging High-Growth Office Micromarkets

The research stresses high-performing office micromarkets in India’s cities. They grow more important.

Among them, Whitefield in Bengaluru had the top rental rise. It grew 18.7% over three years. Tech companies and new business clusters drive strong demand.

Meanwhile, Chennai’s Northern Suburbs led macro-markets this quarter. Rentals jumped 9.7% quarter on quarter.

Thus, these corridors speed up. Reasons include better infrastructure, fresh developments, and growing corporate presence.

What Does This Mean for India’s Commercial Real Estate Market?

Q4 2025 CPRI data shows India’s office rentals stay stable and grow. Mumbai leads in growth. Meanwhile, Gurugram keeps a fast pace. Bengaluru remains the largest office hub.

At the same time, new micro-markets in big cities drive the future demand. As businesses expand in India, demand for top Grade A spaces in key areas will stay strong.

Elevate your decisions in real estate as a developer or broker with CRE Matrix‘s data-driven insights. Book a demo now!

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IBM Leases 1.62 Lakh Sq Ft at Embassy Golflinks, Bengaluru for ₹2.4 Cr Monthly Rent

IBM leases space

In one of the largest commercial leasing transactions of 2025, IBM India Pvt. Ltd. has leased 161,884 sq ft of Grade-A office space at Embassy Golflinks Business Park (EGL), Bengaluru. According to documents accessed by CRE Matrix, the transaction was registered on 23 September 2025.

Transaction Structure and Financial Terms

IBM India Pvt. Ltd., the licensee in the transaction, has leased a total built-up area of 161,884 sq ft. The starting monthly rent is ₹2,42,82,600, translating to ₹150 per sq ft. The company has paid a security deposit of ₹14,56,95,600 for the lease. This runs for a total tenure of 60 months with a lock-in period of 36 months. The agreement also provides IBM with 216 car parking slots at a charge of ₹4,526.70 per slot. IBM was scheduled to take possession on 17 April 2025, followed by a 45-day rent-free fit-out period before full rent commences.

Fit-Out Terms Highlight Long-Term Occupation Strategy

The lease includes a detailed fit-out arrangement that reflects a large-scale and long-term workspace buildout. During the fit-out phase, IBM will pay a fit-out rent of ₹63.09 per sq ft and has furnished a fit-out security deposit of ₹6,12,79,569. This is equivalent to six months of fit-out charges. Major technology and consulting firms typically use such commercial terms when they make substantial investments in customized office infrastructure. They do this to support delivery, engineering, and innovation-led teams.

Prime Campus Location Strengthens EGL’s Market Position

IBM has leased space across Unit 3 and Unit 4 on the third floor and Unit 1 and Unit 2 on the fourth floor of the Pine Valley block at Embassy Golflinks, Challaghatta. Positioned between Koramangala and Old Airport Road, Embassy Golflinks Business Park remains one of India’s most sought-after integrated technology campuses.

The park continues to attract Fortune 500 occupiers across IT services, BFSI, cybersecurity, research and development, and consulting sectors. IBM’s high-value lease further reinforces the sustained demand for Grade-A office spaces in Bengaluru. Furthermore, it highlights the city’s continued importance as a global technology and business hub.

Elevate your decisions in real estate as a developer or broker with CRE Matrix‘s data-driven insights. Book a demo now!

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India’s Office Real Estate: A Narrative of Renewed Momentum and Tightening Markets

India Office Report

India’s office real estate sector is witnessing a strong recovery and structural shift in 2025, fuelled by sustained demand from Global Capability Centres (GCCs), healthy domestic corporate expansion, and a growing preference for quality Grade‑A office space. Across major cities from Bengaluru to Hyderabad and the Mumbai Metropolitan Region (MMR), vacancy rates are tightening, and rental values are on the rise, signaling investor confidence and robust occupier activity in a market that had grappled with pandemic‑era challenges.

According to the CREDAI‑CRE Matrix India Office Report for Q2 CY’25, vacancy rates in the office market have declined significantly as demand continues to outpace supply, backed by strong tenant interest and healthy absorption across key hubs.

 Key Takeaways

1. India’s office vacancy has declined to 14.7%

The overall office vacancy rate in India fell to 14.7% in H1 CY’25, reflecting a tightened market where occupier demand is absorbing new and existing space more quickly than it is coming to market. This improvement is supported by robust absorption of 34.5 million sq ft of office space in H1 CY’25.

2. 28.8 msf of new supply added in H1, with Pune contributing nearly 30%

Despite the strong leasing momentum, the market saw 28.8 million sq ft of new office supply in H1 CY’25, with Pune emerging as a key contributor — accounting for almost 30% of the new completions. The influx of fresh stock highlights continued development activity, especially in emerging micro‑markets outside the traditional metros.

3. Hyderabad is set to overtake MMR in office stock

One of the most striking trends in 2025 is Hyderabad’s rapid growth trajectory. The CREDAI‑CRE Matrix report notes that Hyderabad’s office stock is poised to overtake that of the MMR by the next quarter, underlining the city’s emerging role as a major office destination driven by IT/ITeS, services, and flexible workspace growth.

4. Pan‑India rentals climbed to ₹90.7 psf/month

Along with tightening vacancy, rental values across India’s office markets have climbed, with pan‑India averages rising to around ₹90.7 per sq ft per month — a reflection of landlords’ strengthened pricing power amid strong occupier demand.

What’s Driving the Office Market Upturn?

Strong occupier demand and steady business expansion are driving leasing activity across key office markets. This is tightening vacancies and strengthening rental values across cities.

GCC Expansion and Strong Domestic Demand

A central theme across recent reports is the significant contribution of Global Capability Centres (GCCs) to office leasing activity. GCCs, representing multinational service and technology centres, continue to expand their footprint in Indian cities. This has driven substantial absorption volumes and lowered vacancy. The trend is supported by India’s cost competitiveness, large talent pool, and favourable business environment.

Occupier Diversity and Sectoral Strength

Leasing activity is broad‑based — with IT/ITeS, BFSI (banking, financial services and insurance), and co‑working/flexible office models contributing significantly to demand. The diversified demand base has helped sustain absorption across cyclical variations, and flexible workspace continues to gain traction, especially in Hyderabad.

Emerging Cities and Supply Growth

While traditional hubs like Bengaluru, MMR, and Delhi‑NCR remain major contributors to demand, secondary and emerging markets — such as Pune and Hyderabad — are increasingly shaping supply dynamics. Pune’s strong addition of new stock and Hyderabad’s rapid growth reflect shifting preferences and infrastructure‑led expansion.

Rental Resilience

With vacancy rates shrinking and demand robust, landlords have been able to push rental values higher. Cities such as Delhi and Mumbai continue to command premium rents, contributing to the overall pan‑India rental increase.

City‑Level Snapshots

  • Bengaluru continues to lead leasing activity thanks to strong tech and GCC demand.
  • Delhi‑NCR remains a key market with ongoing corporate and BFSI leasing.
  • Hyderabad’s rapid office stock build‑out signals its rise as a major corporate hub.
  • Pune’s emergence as an important supply centre suggests offices are decentralising beyond traditional metros.

Outlook: What’s Next for India’s Office Real Estate?

The current market narrative points to sustained leasing momentum, continued infrastructure‑led expansion in emerging cities, and robust occupier confidence. Vacancy rates are likely to stay tight in the near term, while rental growth could continue as quality Grade‑A space remains in high demand. The ongoing GCC expansion story and domestic corporate growth are expected to remain key drivers of market performance.

In summary, India’s office market in 2025 exemplifies not just a post‑pandemic rebound — but a structural transformation rooted in diversified demand, new city‑level growth centres, and strengthening fundamentals.

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Rise and Shine of Commercial Office Spaces in India

There is no denying that the Indian commercial real estate market is enormous and is witnessing a healthy rise in demand in 2022 and this momentum is projected to continue for the rest of the year. 

Although the pandemic had a significant impact on the country’s increasing office segment with occupiers cutting back on spaces, surprisingly, the market has bounced back in 2021, with essential occupiers returning to the office. There is an immense belief that a strongly recovering economy and powerful progress in India’s startup ecosystem are going to help advance the growth trajectory upwards.

According to a joint report released by CRE Matrix and Colliers ‘Startups Scale Up’, startups are estimated to lease approximately 29 million sq. feet between 2022 to 2024, a 1.3 times surge from the 2019-2021 duration. The rise in entrepreneurship and the fast development of startups has been one of the most fascinating trends in the office space market in India. 

Startups are believed to be the fastest developing occupier growth among other occupier groups, and presently take up 10% of commercial office spaces. This has led to many openings for office space providers to reconsider and reposition their workplace offerings to draw a variety of occupiers. 

According to the India Office Report Q4 CY’21 by CRE Matrix, the past year has witnessed a rising demand for office leasing, an increase in office stock, stabilization of office vacancy, a rise in rentals, and sustained job growth in the startup space. Thanks to increased digital adoption across all businesses and the rise in vaccination numbers, there is hope that office demand in 2022 may return to pre-Covid levels. 

Increase in demand from Various Sectors 

More than 8,100 digital companies have been set up across the metro cities in recent times. These companies have generated around 6 lakh jobs in India. Increased availability of office space in India has propelled demand from banking, financial services, insurance (BFSI), manufacturing, and consulting sectors. 

For instance, Noida and Gurgaon alone have almost 8.5 million sq. ft. of commercial space in the pipeline. According to the India Office Report Q4 CY’21 by CRE Matrix, the majority of the demand for office leasing continued to be Tech (startups and IT/ITeS majors), BFSI, and Co-working segments. They added almost 58% to office demand in 2021 and 63% in the last quarter.

Factors Propelling Growth in Commercial Office Space Post Pandemic 

  • Co-working spaces are increasing rapidly in the top urban cities of India
  • The economy recovered fairly quickly and numerous companies reopened offices
  • Reverse migration to tier-1 and tier-2 cities and the requirement for office infrastructure in developing locations thereby drove commercial realty development in these cities. 
  • Companies are now providing improved facilities, digital integration, health, and safety features.
  • Infrastructure has improved a lot in smaller cities with numerous initiatives by the Government.
  • There has been a rise in the flexible office space in India. The businesses are planning to continue with alternative work models to maintain flexibility at workstations and enhance business profitability. 

According to the India Office report by CRE Matrix, there has never been a more significant period for the increase in demand for commercial office space in India, particularly after the damage inflicted in the economy thanks to the pandemic. Thanks to digitization across all industries, there will most likely be huge chunks of development in commercial office demand this year. 

For more such exciting analysis and details on real estate, visit CRE Matrix.