India’s office rental market has shown impressive growth over the past two and a half years, with some of the country’s major metros seeing substantial increases in rental values. According to a recent report by Anarock, office rent in the Mumbai Metropolitan Region (MMR) rose by 28%, Hyderabad saw a 24% increase, and Delhi-NCR experienced a 20% hike. Despite global economic uncertainties, the demand for premium office spaces has surged, particularly in the wake of the pandemic, with businesses pushing for a full return to office environments.
As companies look to establish or expand their presence in key business hubs, the growth in office rentals is a clear indicator of the recovering commercial real estate market in India. The rise in rental values reflects not only improved business sentiment but also significant investments in infrastructure upgrades across the country’s prime office locations.
Office Rent Growth Across Key Indian Cities
1. Mumbai Metropolitan Region (MMR):
- Growth: 28% increase in rent.
- New Rent Value: ₹168 per sq ft (up from ₹131 per sq ft in 2022).
MMR has emerged as the leader in rental growth, driven by robust demand for Grade A office spaces. US-based banks, particularly in the BFSI (Banking, Financial Services, and Insurance) sector, account for a significant portion of leasing activity. According to Peush Jain, Managing Director of Commercial Leasing & Advisory at Anarock, US companies’ interest in prime office spaces in India remains strong despite global policy uncertainties.
2. Hyderabad:
- Growth: 24.1% increase in rent.
- New Rent Value: ₹72 per sq ft (up from ₹58 per sq ft in 2022).
Hyderabad has experienced a dramatic rise in office rents, particularly driven by the technology sector and global companies seeking access to India’s dynamic talent pool. The city’s rapid transformation into a tech and innovation hub, along with its strong infrastructure, has contributed to the increase in demand for premium office spaces.
3. Delhi-NCR:
- Growth: 20% increase in rent.
- New Rent Value: ₹110 per sq ft (up from ₹92 per sq ft in 2022).
Delhi-NCR’s office rental market has shown resilience, with significant growth in leasing activity in both the corporate and tech sectors. The increase in rental values reflects businesses’ ongoing recovery and their confidence in the region’s economic prospects.
4. Other Cities:
- Bengaluru: Office rent rose 16%, from ₹82 to ₹95 per sq ft, driven primarily by demand from tech companies and global capability centers (GCCs).
- Pune and Chennai: Moderate growth of 11.1% and 9.1%, respectively. Pune’s office rent is ₹80 per sq ft, while Chennai’s is ₹72 per sq ft.
Factors Driving the Rental Growth
1. Post-Pandemic Rebound:
As businesses move towards a full return to office life, the demand for quality commercial spaces has increased. The pandemic’s disruption led to temporary leasing slowdowns, but now, as companies solidify their operations, office spaces in prime locations are becoming a priority once again.
2. Confidence in India’s Talent Ecosystem:
The growing confidence in India’s talent pool is another factor contributing to the rise in office rents. Cities like Hyderabad and Bengaluru are especially seeing demand from technology firms looking to capitalize on India’s strong workforce and infrastructure.
3. Infrastructure Upgrades:
Ongoing investments in city infrastructure, including improved transportation networks and technology hubs, have further fueled the demand for office spaces. The development of commercial real estate in these cities is designed to accommodate the growing demand for modern, flexible office environments.
Expert Insights
Peush Jain, Managing Director – Commercial Leasing & Advisory at Anarock, noted:
“Despite global economic uncertainties, demand from US-based companies remains strong. US banks, in particular, contribute significantly to leasing in MMR. The return-to-office momentum in India is undeniable, with US companies accounting for nearly half of the office leasing activity in the country.”
Shesh Rao Paplikar, Founder & CEO of BHIVE Workspaces, commented:
“The 16% increase in office rentals in Bengaluru signals a resilient rebound in commercial real estate, driven primarily by strong demand from technology, GCCs, and flexible workspace providers. The growth reflects rising business confidence in India’s robust commercial infrastructure.”
Kirthi Chilukuri, Founder & MD of Stonecraft Group, shared:
“The surge in office rentals across India’s major cities signals a renewed business confidence. Hyderabad’s 24% growth highlights its transformation into a hub for tech and innovation-driven enterprises, supported by strong infrastructure and a dynamic talent pool.”
Summary Table: Office Rent Growth Highlights
| City | Growth in Rent | New Rent Value | Growth from 2022 |
|---|---|---|---|
| MMR (Mumbai) | 28% | ₹168 per sq ft | ₹131 per sq ft |
| Hyderabad | 24.1% | ₹72 per sq ft | ₹58 per sq ft |
| Delhi-NCR | 20% | ₹110 per sq ft | ₹92 per sq ft |
| Bengaluru | 16% | ₹95 per sq ft | ₹82 per sq ft |
| Pune | 11.1% | ₹80 per sq ft | – |
| Chennai | 9.1% | ₹72 per sq ft | – |
FAQ Section:
Q1: Which city saw the highest growth in office rent in the past two and a half years?
MMR (Mumbai Metropolitan Region) experienced the highest growth, with office rents rising by 28% from 2022 to 2025.
Q2: What factors have driven the increase in office rent across India?
The post-pandemic rebound, rising confidence in India’s talent pool, and significant infrastructure upgrades have all contributed to the growth in office rents.
Q3: What is the new average rent in MMR, and how much has it increased?
The average rent in MMR has increased by 28%, reaching ₹168 per square foot, up from ₹131 per square foot in 2022.
Q4: Why is Hyderabad seeing such a sharp rise in office rents?
Hyderabad’s transformation into a tech and innovation hub, along with its strong infrastructure and dynamic talent pool, has driven the 24.1% increase in office rental values.
Q5: What is the office rent growth like in cities such as Pune and Chennai?
Pune and Chennai saw more moderate growth, with office rents rising by 11.1% and 9.1%, respectively.