India set to be world's 4th-largest office market as stock nears 1 billion sq ft
India's total office stock is expected to cross the 1 billion sq ft mark by the third quarter of 2025, positioning India as the fourth-largest office market globally. This is led by two decades of rapid expansion driven by strong demand, institutional capital, and the country's evolving economic role.
As of first half of 2025, India's office stock stood at 993 million sq ft, having grown from under 200 million sq ft in 2005 at a compound annual growth rate (CAGR) of 8.6%, showed a Knight Frank India's report.
The top three markets including Bengaluru's 229 million sq ft, NCR's 199 million sq ft, and Mumbai's 169 million sq ft, account for nearly 60% of the total stock. Another 33% is contributed by Hyderabad, Pune, and Chennai, while Ahmedabad and Kolkata make up the remaining 7%.Grade A space comprises 53% of the total office supply, with Grade B and C at 43% and 4% respectively. The current valuation of India's office stock is pegged at $187 billion or Rs 16 lakh crore.'As we prepare to cross the 1 billion sq ft threshold, it's not just a number, it reflects the growing institutionalisation, maturity, and global relevance of India's office market…It also reinforces India's positioning as a global economic powerhouse, offering a compelling value proposition for multinational businesses and institutional capital,' said Shishir Baijal, CMD, Knight Frank India.
Based on different growth scenarios, Knight Frank estimates India could add another billion sq ft between 2036 and 2041. At a CAGR of 12.7%, the target could be reached by 2036, while a more conservative 10.9% CAGR suggests 2041 as a realistic estimate.'India's office market is at a defining moment. Poised to cross the 1 billion sq ft threshold in 2025 with 0.99 billion sq ft already achieved, India has become the world's fourth-largest office market. This milestone speaks to the sheer scale of our commercial real estate, but more importantly, it underscores the sector's resilience, institutional strength, and unwavering growth trajectory,' said Gulam Zia, Senior Executive Director at Knight Frank.India's office market has evolved significantly since the 1990s, transitioning from a back-office base for the global tech industry to a hub for global capability centres (GCCs) and institutional-grade real estate. Key policy shifts such as Special Economic Zone (SEZ) regulations, Real Estate Regulatory Authorities (RERA), Real Estate Investment Trust (REIT) framework, and infrastructure upgrades have enabled consistent growth and higher transparency.Sustaining this trajectory will require policy and capital interventions to avoid supply bottlenecks, rising rents, and potential occupier relocation, Knight Frank India said.One of India's defining advantages remains its cost-efficiency, with average office rents at $0.96 per sq ft per month in 2025. This sub-dollar pricing, combined with increased Grade A supply, has bolstered the country's attractiveness to multinationals.'India's ability to offer modern, tech-enabled, green-certified workspaces at sub-dollar rates presents a compelling proposition for global enterprises looking to optimise costs while enhancing workplace experience. This cost-quality dynamic will continue to fuel sustained occupier interest and reinforce India's central role in global corporate real estate portfolios,' said Viral Desai, Senior Executive Director, Knight Frank India.Cities like Bengaluru, Hyderabad, and Chennai dominate in Grade A supply due to strong IT and GCC demand. Legacy markets like Mumbai and NCR reflect a more even mix across grades, while Kolkata has the highest share of Grade C stock at 11%, pointing to the need for asset upgrades.As India eyes a $10 trillion economy by 2030, the demand for modern, efficient, and sustainable office spaces is expected to intensify. The current phase of institutionalisation and value-led growth is laying the foundation for India's office market to scale its next frontier.
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