The third quarter of 2025 reported the highest office absorption of the current year, driven by GCCs, which kept the office market buoyant amid global trade uncertainties and geopolitical tensions, according to a latest report by Vestian, a U.S.-based occupier-focused workplace solutions firm.

The pan-India office absorption rose 6% year-on-year and 5% compared to the previous quarter amid global macro uncertainties and geopolitical frictions, reaching 19.69 msf. This marked the second-highest absorption level ever recorded, following the historic peak of 21.62 mn sq ft in Q4 2024. The Vestian data show southern cities provided the thrust for this growth, with Bengaluru, Chennai, and Hyderabad together accounting for 50% of the pan-India absorption in Q3 2025.

The report said the top 10 micro-markets by absorption dominated in Q3 2025, accounting for 70% of the pan-India absorption. However, its share dropped from 82% in Q3 2024 and 80% in Q2 2025. In terms of value, these 10 micro-markets reported an absorption of 13.9 msf in Q3 2025, a 10% decline over the year and 8% compared to the preceding quarter. The reduced share of the top 10 micro-markets underscores increasing geographical diversification. The report attributes it to enhanced intracity connectivity, ample availability of grade-A and sustainable office spaces, competitive rentals to minimise operating costs, and maturing residential localities nearby.

Shrinivas Rao, FRICS, CEO, Vestian, said, “Construction activity also gained momentum, with significant supply additions across the key markets. Robust absorption, healthy supply, and a diversified occupier base are expected to drive the next wave of growth in the coming quarters. H-1B visa restrictions may further amplify the demand for offices in India as more and more GCCs expand their footprint in India.”

Among the office markets, Bengaluru led the pan-India absorption with 4.63 msf in Q3 2025, followed by NCR at 4.01 Mn sq ft and Mumbai at 2.98 msf. Kolkata recorded the lowest absorption of 0.42 msf in Q3 2025, yet registered a 21% quarter-on-quarter and 285% year-on-year increase, primarily due to a low base effect. Sector-wise, IT-ITeS accounted for 31% of the total absorption reported in Q3 2025, a major decline from nearly 50% in Q2 2025. Meanwhile, the BFSI sector’s share more than doubled to 15% from 6% during the same period, underscoring growing occupier interest from financial institutions. The share of flexible spaces remained stable at 14% compared to the previous quarter.

As absorption increased, construction activity also rose in Q3 2025, with new completions reaching 16.1 msf, a 10% quarterly and 26% annual surge. The increase in supply was largely driven by project completions in Pune, Bengaluru, and NCR, which together contributed 63% of the total new completions across the top seven cities. Pune led new supply additions with 3.70 msf, accounting for 23% of the pan-India supply, followed closely by Bengaluru with 3.40 msf (21% share). Chennai witnessed an annual increase of 320% in new office supply, driven by a low base effect. The city added 2.10 msf of new office space—its highest supply addition in the past seven quarters.