Bengaluru: The Office Space King of India

So, picture this: it’s the first half of 2025, and Bengaluru is strutting its stuff as the undisputed champion of India’s office real estate market. With a whopping 10.4 million square feet of office space gobbled up, the city’s not just flexing its muscles; it’s showing everyone how it’s done. This figure, straight from a recent Savills India report, is a 1% increase from last year, and it makes up a staggering 27% of all office space leased across six major cities in India. Talk about making a statement!

But wait, let’s not just throw numbers around. What does this really mean? Well, it’s a clear sign that Bengaluru's got some serious economic mojo going on. You know how some cities just have that vibe? Bengaluru is like that cool kid in school who’s not only smart but also knows how to throw a great party. It’s a global tech and business hub that’s attracting attention from all corners.

Now, if you think Bengaluru is the only player in the game, think again. The national office market is also on fire, with a total of 38.2 million square feet leased across those six cities, marking a 7% annual increase. It’s like a rising tide lifting all boats, even amidst global economic uncertainties.

The Tech Engine

So, what’s fueling Bengaluru’s office market rocket? Drumroll, please… it’s the tech sector and the relentless growth of Global Capability Centres (GCCs). Imagine GCCs as the backbone of the city’s office leasing scene, driving nearly 67% of all leasing activity in the first half of the year. It’s like they’re the star players on a sports team, and Bengaluru is their home turf.

The IT and IT-enabled services (IT-BPM) sector, along with engineering and manufacturing firms, accounted for about 60% of all leased space. And here’s the kicker: big deals are the name of the game. Companies are not just looking for any old office space; they want large-scale deals—think spaces of 100,000 square feet or more. It’s like they’re saying, “Go big or go home!”

And let’s not forget about the AI industry. It’s like the new kid on the block that everyone wants to hang out with. The demand from AI-driven research labs and tech firms is expected to push office rents up by 5-7% in 2025. This surge is partly thanks to the Indian government’s push to set up more AI research facilities, which is like adding fuel to an already roaring fire.

The Competition

But wait, Bengaluru isn’t the only city making waves. Other major Indian cities are also stepping up their game. Delhi-NCR came in second with 6.8 million square feet of gross absorption in H1 2025, while Mumbai wasn’t far behind at 6.7 million square feet. In Delhi-NCR, the IT-BPM and Banking, Financial Services, and Insurance (BFSI) sectors were the heavy hitters, with GCCs making up over a quarter of the region’s leasing.

Mumbai’s demand was similarly driven by tech and financial services, which held a 58% share of leasing activity. And let’s not overlook Chennai, which saw a 14% year-on-year increase with 5.5 million square feet of gross leasing, thanks to the IT-BPM, BFSI, and flexible workspace sectors.

Then there’s Pune, which experienced a jaw-dropping 2.4 times year-on-year increase in new supply, hitting 7.0 million square feet—the highest in two decades! It’s like a buffet of office spaces, responding to the growing confidence of occupiers and a strong demand pipeline.

The Bigger Picture

Looking at the national scene, the office real estate market is not just surviving; it’s thriving. Total Grade A office stock across India has reached 822.9 million square feet as of Q2 2025, with overall vacancy rates dropping from 15.9% to 14.7% over the past year. That’s a solid indicator of a healthy market.

New supply is also booming, with a 44% year-on-year growth and 25.3 million square feet of new office spaces completed in the first half of the year. This influx of high-quality spaces is crucial for meeting the evolving demands of occupiers who are increasingly focused on sustainability and employee well-being. It’s like the office market is finally catching up with what modern businesses really want.

And here’s the kicker: demand is diversifying beyond just the traditional IT sector. Engineering, manufacturing, and BFSI sectors are stepping into the spotlight, while flexible workspaces are gaining traction, contributing 16% to total absorption. It’s a reflection of the broader shift towards agile and hybrid work models.

Conclusion

In a nutshell, Bengaluru’s dominance in India’s office market, with 10.4 million square feet of leased space, is a testament to its powerful tech ecosystem and its central role in the global operations of multinational corporations. The city’s performance, driven largely by the relentless expansion of GCCs and a thriving IT sector influenced by AI, sets the pace for the rest of the country.

With projections indicating that India’s office absorption will exceed 70 million square feet by the end of 2025, it looks like Bengaluru, the Silicon Valley of India, is not just leading the charge but is also poised for sustained growth and transformation, continually adapting to the dynamic needs of modern businesses.