Mumbai has emerged as India's most expensive office market, with a significant 28% surge in rental values between 2022 and 2025. This increase has propelled average rentals from ₹131 per square foot to ₹168 per square foot, marking a substantial shift in the commercial real estate landscape. The surge is primarily attributed to the robust post-pandemic demand for premium office spaces, as companies increasingly prioritize quality and strategic locations for their operations.
Hyderabad follows Mumbai as the second most expensive office market in India, experiencing a remarkable 24.1% growth in rental values during the same period. Average rentals in Hyderabad have risen from ₹59 per square foot in 2022 to ₹72 per square foot in 2025. This growth underscores Hyderabad's increasing prominence as a preferred destination for businesses, particularly in the IT and technology sectors.
The Mumbai Metropolitan Region (MMR) has particularly benefited from strong demand in micro-markets such as Bandra-Kurla Complex (BKC), Lower Parel, and Andheri East. These locations remain highly sought after by companies in the finance, IT/ITeS, and startup sectors, driving up rental values and solidifying Mumbai's position as a prime commercial hub. The robust economic activity and infrastructure developments in MMR have further contributed to its attractiveness for businesses.
Hyderabad's growth is fueled by its proactive government policies, cost-effectiveness, and a thriving IT corridor. The city's strategic location and conducive business environment have attracted numerous companies, leading to increased demand for office spaces and a corresponding rise in rental values. Hyderabad's appeal lies in its ability to offer a balance between cost-efficiency and strategic advantages, making it an attractive option for businesses looking to expand or relocate.
Delhi NCR has also witnessed substantial growth, with office rental values increasing by 20% between 2022 and 2025. This growth is primarily driven by infrastructure projects and rising demand in areas such as Noida and Gurugram. The improved connectivity and infrastructure in Delhi NCR have made it a more attractive destination for businesses, leading to increased demand for office spaces and higher rental values.
Bangalore, known as India's tech capital, has experienced a 15.8% rise in office rental values. Key areas such as Whitefield, Outer Ring Road, and Electronic City continue to attract global occupiers, driving up demand and rental values. Despite being a relatively expensive market, Bangalore remains a preferred destination for technology companies due to its skilled workforce and vibrant ecosystem.
Pune and Chennai have recorded more moderate growth rates of 11.1% and 9.1%, respectively. These cities have witnessed steady expansions in their IT/ITeS and industrial segments, contributing to a gradual increase in office rental values. While their growth rates may not be as high as Mumbai or Hyderabad, Pune and Chennai continue to be important commercial centers with stable demand for office spaces.
Several factors have contributed to the overall growth in India's commercial real estate market. The country's robust economic performance, increasing urbanization, and an expanding base of global companies seeking high-quality office spaces have all played a significant role. Additionally, the increasing popularity of Real Estate Investment Trusts (REITs) and the return of office absorption to pre-pandemic levels have further boosted investor sentiment and market activity.
Looking ahead, the Indian office market is expected to maintain its upward trajectory. As businesses increasingly prioritize a return to office life and seek premium, future-ready workspaces, demand for commercial spaces is likely to remain strong. Cities like Mumbai, Delhi NCR, Hyderabad, and Bangalore are poised to continue attracting global investment and driving innovation, further solidifying India's position as a key hub for commercial real estate activity.
