Bengaluru’s office real estate market recorded a gross leasing volume of 11.8 million sq ft in the first half of 2025, marking the second consecutive half-yearly period above 10 million sq ft, according to a report by JLL. The performance highlights sustained demand in key submarkets and a continuing preference for quality Grade A office spaces, particularly in technology-driven sectors.
The report indicates that the SBD (South Business District) submarket dominated office absorption, especially in the Outer Ring Road (ORR) North and South-East corridors, with large deals exceeding 50,000 sq ft accounting for 80% of new leases. Despite no new supply in these clusters during the period, strong occupier activity demonstrated the enduring appeal of established business hubs in the city.
In Q2 alone, Bengaluru’s gross leasing volume reached 7.53 million sq ft, contributing to the H1 total of 11.8 million sq ft. Technology firms led the demand, representing 40% of leasing activity, a 1.6-fold increase compared to Q1. Other sectors, including manufacturing, fintech, co-working, healthcare, engineering R&D, and select financial services, also contributed to space absorption, reflecting diversification in office demand.
During the period, the SBD City submarket accounted for a 30% share of Bengaluru’s new office supply, followed by SBD North, Whitefield, and SBD South. Grade A developers contributed over one-third of the new supply, signaling continued emphasis on modern, sustainable workplaces equipped with advanced facilities.
Overall, office market vacancy rose slightly by 60 basis points to 12% in Q2, driven by the addition of new supply. Submarkets with recent inventory experienced higher vacancy, while the Central Business District (CBD) and Electronic City saw reduced rates, indicating steady city-wide absorption and consistent occupier demand in prime areas.
Rental and Capital Value Growth
Bengaluru’s office market saw rental growth of 7.3% year-on-year, primarily driven by developers setting above-market rates in prime submarkets with limited availability. The shift toward quality and environmentally certified buildings has further contributed to rental appreciation. Capital values increased by 9.6% year-on-year, reflecting strong investor confidence in high-quality assets with reputable tenant profiles. Portfolio deals are being actively considered, highlighting growing institutional interest in Bengaluru’s office properties.
Developers increasingly focus on green certifications and sustainable infrastructure, integrating eco-friendly features and energy-efficient systems to attract global tenants. This emphasis on sustainability is aligning with evolving corporate priorities, including hybrid work models, wellness-focused workspaces, and environmentally responsible building practices.
Bengaluru’s office market is expected to maintain momentum as global firms expand technology and back-office operations, while domestic companies continue to lease space in prime business districts. The market is witnessing growing demand in flexible workspace solutions and emerging sectors such as healthcare/biotech, fintech, and engineering R&D.
Despite new supply, the city is maintaining rent growth and high absorption rates, creating a positive investment climate. Analysts expect capital values to continue rising, supported by strong fundamentals, a diverse tenant base, and sustained interest from domestic and international investors.
.png)