Hyderabad has emerged as the country’s co-working hub, contributing 29 per cent to sectoral demand in Q2 CY25.
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India’s office market remained buoyant in H1 CY25 with 34.5 mn sq. ft demand, led by Bengaluru, Delhi-NCR and Pune, according to a CREDAI–CRE Matrix report. Despite 28.8 mn sq. ft of fresh supply, vacancy fell 210 bps as GCCs, BFSI, and co-working drove absorption. Rentals rose to ₹90.7/sq. ft, with Hyderabad poised to surpass Mumbai Metropolitan Region (MMR) in office stock.
The sector saw a balanced demand-supply ratio of 1.3x maintained over the last six quarters, with continued occupier confidence and the strategic expansion of GCCs. In Q2 CY25 alone, the market absorbed 17.3 million sq. ft. of new office space.
“India’s office market is entering a new era of maturity and expansion,” said Shekhar Patel, President, CREDAI. “The diversification across sectors, from BFSI and co-working to new-age industries, along with strengthening market rent premiums, is laying the foundation for a structurally strong sector that will power India’s journey toward becoming a $30 trillion economy.”
Demand & supply
From a demand perspective, IT/ITeS remained the largest occupier with a 24 per cent share, followed by BFSI at 20 per cent and co-working at 19 per cent. Hyderabad has emerged as the country’s co-working hub, contributing 29 per cent to sectoral demand in Q2 CY25.
On the supply side, emerging markets demonstrated strong momentum. Pune and Hyderabad together accounted for 54 per cent of new stock in Q2, while Pune and Bengaluru collectively contributed 40 per cent of aggregate demand, reinforcing their status as major absorption centres. This geographic diversification reflects the market’s evolution beyond traditional metros and the growing acceptance of tier-2 cities as viable business destinations.
Despite significant additions to supply, the demand-supply balance remained favourable, driving further compression of vacancy levels across prime hubs such as Bengaluru, Chennai, and MMR. Pan-India rentals climbed 4.7 per cent sequentially in Q2 CY25, reflecting sustained pricing power in key micro-markets.
The report concludes that the outlook for the remainder of 2025 is robust, backed by a strong pipeline of quality supply across tier-1 cities. Healthy levels of pre-commitment leasing, coupled with compressed vacancy rates, are expected to provide stability and sustain momentum.
Published on August 29, 2025
