Q3 office absorption up 12% quarter-over-quarter, driving 31% y-o-y growth in January-September 2025 net absorption

• With Q3 leasing at 3.03 million sq ft, January-September 2025 GLV hit a record-high 14.8 million sq ft. Tech maintained its leadership with 26% of leasing activity, while BFSI outperformed expectations, increasing its space uptake to capture 25% of quarterly GLV.
• SBD led quarterly leasing activity, driven primarily by ORR South-East and SBD City submarkets, with Whitefield as a close second. Large deals (>100,000 sq ft comprised over 50% of quarterly GLV, reflecting robust corporate expansion and strong occupier appetite.

Q3 new supply of 2.3 million sq ft, down q-o-q but pushed nine-month 2025 supply to 10.5 million sq ft

• SBD City dominated Q2 supply with a 47% share, followed by Whitefield and CBD. Multiple projects nearing completion in the SBD submarket are expected to drive near-term supply additions.
• Office vacancy fell by 80 bps a-o-q to 11.2% in Q3. Strong leasing in ORR Southeast and SBD North drove vacancy reduction while CBD, SBD City, and Whitefield, despite new supply saw vacancy drop due to pre-leased asset completions.

Rentals rose 8.0% y-o-y as developers priced new buildings above market rates, especially in prime markets with low vacancy

• Capital values increased 10.4% year-over-year, driven by robust investor demand for premium assets with quality tenant profiles and active portfolio transaction activity.
• Premium tech parks and standalone buildings will keep driving rent increases in coming quarters. Developers are upgrading properties with green certifications and improvements, which should earn higher rents for these improved office spaces.

Outlook: Bengaluru likely to remain a top commercial destination in India with sustained long-term investor interest

• Tech sector is likely to retain its market dominance, while diversification is gaining momentum with manufacturing, fintech, and flex space providers expanding their footprint. Ongoing expansion of GCCs is anticipated to bolster office demand fundamentals.
• Bengaluru’s office market shows resilience by absorbing new supply and maintaining rent growth. Property values are likely to rise amid strong demand and solid fundamentals attracting domestic and international investors.