Mumbai: India’s top eight office markets recorded a historic surge in activity in Q1 2025, clocking 28.2 million sq. ft. in transactions — the highest ever in a single quarter, according to a new report from real estate consultancy Knight Frank India.

This robust performance marks a 74% year-on-year (YoY) growth, surpassing the previous peak of Q3 2024 by a striking 48%, driven by strong economic momentum and heightened occupier confidence.

Bengaluru Leads the Charge

Bengaluru emerged as the star performer, accounting for 12.7 million sq. ft. — 45% of the total office space uptake and a staggering 259% YoY increase. Of this, 58% (7.4 million sq. ft.) came through pre-commitments, underscoring long-term occupier faith in the market.

Other top-performing cities included:

Hyderabad – 4 million sq. ft.

Pune – 3.7 million sq. ft.

Mumbai – 3.5 million sq. ft.

Both Bengaluru and Pune outpaced the national average growth, emerging as key volume drivers.

GCCs and Flex Workspaces Fuel Demand

Global Capability Centres (GCCs) were pivotal, contributing 12.4 million sq. ft., or 44% of the total leasing. Third-party IT services followed with 5.5 million sq. ft. (19%), while flex space operators accounted for 5.5 million sq. ft. (20%).

Bengaluru dominated in GCC and IT services, transacting 8 million sq. ft. and 2.1 million sq. ft. respectively.

Pune led in flex space uptake with 1.61 million sq. ft. absorbed in Q1.

Vacancy Shrinks, Rents Climb

“With completions having lagged transactions since 2021, vacancy levels declined from 17.2% to 14.3% in Q1 2025,” noted Shishir Baijal, Chairman and Managing Director, Knight Frank India.

“This supply squeeze across top markets has also pushed rents upward since early 2022. With India’s growth outlook strong, the office market faces minimal headwinds besides constrained supply,” he added.