Pune has rapidly strengthened its position in the commercial real estate sector, nearly doubling its office leasing activity to 6.2 million sq ft this year, as per a new report from a real estate research firm. The strong momentum has been driven by rising demand from the banking and financial services sector, co working players, and IT companies, pushing Pune into the spotlight as a major business destination.
While Pune recorded the most notable growth, Bengaluru continues to hold its place as the country’s leading office market. The city saw leasing activity of 9.95 million sq ft until September 2025, marking a 22 percent increase from last year. Despite ongoing issues related to traffic and infrastructure, demand in Bengaluru remains strong, supported mainly by IT and ITeS companies, global capability centres, and co working operators. IT and ITeS firms alone contributed 27 percent of total office absorption nationwide, with much of this concentrated in areas like Whitefield and Outer Ring Road. Bengaluru also posted the highest rental increase of 9 percent among major metros, while its vacancy rate eased to 12.2 percent from 13 percent.
Pune’s performance stands out with a 97 percent year on year rise in net absorption and a 168 percent increase in new office supply. The growth is linked to affordable rentals, expanding metro and public transport networks, and increasing presence of multinational companies. Once considered a satellite location to Mumbai, Pune has now evolved into a key commercial hub, particularly in the post pandemic era where hybrid and flexible work patterns are influencing office decisions.
In contrast, Kolkata has seen a decline in office leasing. Net absorption fell to 0.85 million sq ft from 1.05 million sq ft last year, a 19 percent drop. Vacancy levels remain high at 17.8 percent, with slower infrastructure development and limited high quality office supply affecting market interest.
Across the top seven office markets in India, overall net absorption reached a six year high of 42 million sq ft. Average rentals rose by 6 percent to 90 rupees per sq ft, while the national vacancy level dropped to 16.2 percent. Chennai recorded the lowest vacancy at 8.9 percent, while Hyderabad had the highest at 26.5 percent due to an excess of new office space. Bengaluru, the National Capital Region, and the Mumbai Metropolitan Region together contributed nearly 60 percent of total leasing activity.
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