India is close to reaching a milestone in the global commercial real estate sector, with projections indicating it will surpass 1 billion square feet of office space by Q3 2025, becoming the fourth-largest office market. This growth reflects an increase from 192 million sq ft in 2005, growing at an 8.6% CAGR. As of June 2025, India has 993 million sq ft, behind China, the US, and Japan. Bengaluru leads with 229 million sq ft, followed by NCR and MMR, making up 60% of the country’s office space, driven by demand from GCCs, IT firms, and multinationals.
India’s Cost Advantage: Quality Spaces Under $1/sq ft
By 2025, the average office rent is expected to fall to $0.96 per square foot per month, giving India a significant “sub-dollar advantage” in the global market.
This affordability has spurred rapid growth in Grade A office spaces, which now comprise 53% of India’s total office stock, drawing increased interest from institutional investors and multinational tenants.
“India’s sub-dollar rent position is a key differentiator. Tenants are now prioritizing quality, ESG standards, and flexibility, areas where India is excelling,” said Viral Desai, Senior Executive Director, Knight Frank India.
Grade-Wise Composition Reflects Market Maturity
The report indicates that Grade A offices constitute 53% of the supply, with Grade B making up 43%, and Grade C 4%. Cities like Bengaluru (70%), Hyderabad (68%), and Chennai (64%) lead in Grade A development. In contrast, older markets like Mumbai and NCR feature a more balanced distribution.
India’s Office Market: Evolving from Volume to Value
India’s progression to 1 billion sq ft has gone through seven transformation phases, from supporting tech firms in the 1990s to becoming a global hub for GCCs and financial services. Policies on SEZs, infrastructure spending, and regulatory reforms have further propelled this growth.
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“Reaching the 1 billion sq ft milestone is more than symbolic; it highlights India’s resilience and the depth of its institutional market,” said Shishir Baijal, CMD, Knight Frank India. “India now offers a compelling value proposition for international capital and corporate tenants.”
