Indian Office Market Achieves Highest Absorption of 2025 Driven by GCCs Amid Global Uncertainties

The Indian office market demonstrated strong performance in the third quarter of 2025, achieving its highest absorption rate for the year. A total of 19.69 million square feet was absorbed, marking a 6% increase year-on-year and a 5% rise from the previous quarter. This robust absorption, second only to a historic peak in Q4 2024, occurred despite prevailing global macro uncertainties and geopolitical tensions. Global Capability Centers (GCCs) were identified as the primary drivers of this demand.

Southern Indian cities, particularly Bengaluru, Chennai, and Hyderabad, were at the forefront, collectively accounting for 50% of the pan-India absorption. While the top 10 micro-markets absorbed 70% of the space, their relative share has decreased, indicating a growing geographical diversification in demand, supported by better infrastructure and amenities. Sector-wise, IT-ITeS saw its share drop to 31% from 50%, while the BFSI sector's share more than doubled to 15%.

Construction activity also saw a significant uplift, with 16.1 million square feet of new supply added, driven by completions in Pune, Bengaluru, and NCR. Vestian CEO Shrinivas Rao expressed optimism for future growth, suggesting that potential H-1B visa restrictions could further enhance demand as GCCs expand in India.

Impact: This sustained demand in the office sector indicates resilience in India's commercial real estate and broader economic growth, potentially benefiting real estate developers, construction firms, and related service providers. Rating: 7/10

Difficult Terms: Absorption: In real estate, the amount of space leased or occupied over a specific period. GCCs (Global Capability Centers): Offshore centers set up by multinational corporations for IT, back-office, and R&D functions. Pan-India: Referring to the entire country of India. msf: Million square feet, a unit of area measurement. YoY: Year-on-year comparison. QoQ: Quarter-on-quarter comparison. Micro-markets: Specific, localized areas within a city with distinct real estate characteristics. Grade-A: High-quality office buildings with modern amenities and standards. BFSI: Banking, Financial Services, and Insurance. IT-ITeS: Information Technology and Information Technology Enabled Services.