India’s office market hits high with 83.3m sqft leased in 2025

India’s office leasing has continued to create successive new peaks since 2023, serving as a strong indicator of the unmatched growth momentum. The year 2025 established yet another new record with 83.3 million sqft of gross leasing volumes for the full year.

With global firms accounting for a robust 58.4% share, India’s position as a strategic business hub offering genuine structural tailwinds was reaffirmed during a period marked by global uncertainties, according to JLL survey.

Gross leasing in other cities was also higher year-over-year or at near-similar levels compared to the previous year. This strongly indicates demand dispersion as occupier strategies evolve in a dynamic environment.

“Global Capability Centers (GCCs) established themselves as the dominant force in India’s office leasing market in 2025, capturing a commanding 37.7% share of gross leasing activity and achieving record-breaking 31 million sqft of space absorption—the highest annual figure ever recorded for this segment. This exceptional performance was complemented by the flex segment reaching unprecedented heights with a 26.6% share in Q4 2025, marking its highest quarterly contribution to date.

Technology maintained its position as the full-year leader with 25.8% of total leasing volumes, while manufacturing/industrial (15.4%) and BFSI (15.2%) segments demonstrated nearly equal market participation.

The convergence of record GCC expansion, robust occupancy levels creating space constraints, and a strong deal pipeline positions India’s office market to potentially breach the 100 million square feet leasing threshold within the next two years, representing a transformational milestone for the sector,” said Rahul Arora, Head - Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.

In Q4 2025, net absorption was driven by Bengaluru accounting for a sizeable 37.2% share, followed by Hyderabad with 15.7% and Delhi NCR with 14.0% shares, respectively.

“The entry of nearly 200 new Global Capability Centers (GCCs) over the past two years, and GCCs now representing approximately 50% of all active space requirements, combined with robust occupancies creating space constraints for large occupiers, signals strong portfolio expansion ahead. With this momentum and our strong deal pipeline, India’s leasing volumes are well-positioned to potentially reach the 100 million sq. ft milestone within the next two years,” said Dr Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.

Vacancy drops to 15.2%, down 50 bps Q-o-Q and lowest in five years. It is worth noting that India’s office market continues to defy the global trends of workspace contraction.

With the headcount and footprint growth-oriented demand resulting in the strongest net absorption historically for Pan-India, vacancy level has now declined to a five-year low with tight, single-digit vacancies prevailing in core markets across all cities. On a q-o-q basis, vacancy level declined across all cities.

In fact, Bengaluru’s vacancy is now at a four-year low while it is at a historic low in Mumbai and Delhi NCR in the past fifteen years.

India successfully bucked the global uncertainties and headwinds to emerge as a stronger office market displaying growth across both headcount and real estate footprint metrics.

Demand from GCCs – both existing ones and new country entrants remains strong, with nearly 200 new GCCs making their way into the country over the past two years.

With GCCs making up ~50 per cent of all active space requirements driven by international banking and financial services players’ appetite for offshore operational centres, complemented by the manufacturing sector dynamism fostered through strategic policy initiatives and strong tech R&D background, the growth runway remains intact.

With tight vacancy rates indicating a strong appetite for business expansion and headcount growth driven by its deep and rich talent pool, India is strongly entrenched as a core for market-changing, innovation ideas setting the stage for continued market momentum.

I have been living in the Gulf for the past 10 years and received land as a gift from my relative. I understand it is a rural agricultural land. If I wish to sell it now what are the tax implications? Pranam Sudhir, Sharjah.

The taxability invariably depends on the location of the land. Long-term capital gains will apply if it is urban agricultural land. If it is located beyond specific distances from a municipality, the receipts are fully tax exempt.

I have overseas assets and planning to return to India. How does the foreign income will be treated on return? Please clarify. Deepak, Dubai.

When you return and qualify as a resident but not ordinarily resident, (RNOR), the reporting of foreign income is determined by your residential status for the relevant financial year. It is suggested that caution should be exercised to review and structure well in advance in particular in the year of return to minimise the risk of dual taxation.