Pune Office Leasing Hits Decade-High at 10.8 mn sq ft; Residential Sales Ease 3% in H2 but Rank Second-Best in Ten Years: Knight Frank India
Pune, Jan 7: Knight Frank India, in its latest report India Real Estate: Office and Residential Market, July–December 2025 (H2 2025), highlights Pune as a standout real estate market, driven by exceptional office sector performance and a residential market undergoing healthy consolidation. The city continues to benefit from its cost competitiveness, strong talent pool, and diversified economic base, supporting robust long-term fundamentals.
Office Market: July–December 2025
Pune’s office market delivered its strongest performance in over a decade in 2025. Leasing activity reached 5.7 million sq ft in H2 2025, marking a 60% year-on-year (YoY) growth. For the full year, office transactions stood at 10.8 million sq ft, up 36% YoY, making 2025 the city’s best year for office absorption in ten years.
On the supply front, office completions remained elevated, with 5.4 million sq ft delivered in H2 2025, reflecting a 63% YoY increase. Annual completions surged to 14.2 million sq ft, a 148% YoY rise, among the highest ever recorded. Consequently, vacancy levels increased by 145 basis points YoY to 13.9%, though they remain below the national average and do not indicate any structural weakening in demand.
Leasing activity was led by third-party IT/ITeS firms, which emerged as the largest occupier segment in H2 2025, accounting for 31% of total transactions, a significant rise from 11% a year earlier. Global Capability Centres (GCCs) maintained strong momentum with a 27% share, while flex space operators contributed 21%, driven by enterprise-backed demand.
Geographically, Peripheral Business District (PBD) East dominated leasing with 46.6% of total transactions, supported by large deals in Kharadi and Mundhwa. Secondary Business District (SBD) West also saw a resurgence, capturing 27.3% share, led by activity in Baner, Balewadi, and Aundh, reflecting occupiers’ preference for scalable offices, modern infrastructure, and competitive rentals.
Commenting on the performance, P Vilas, National Director Occupier Strategy & Solutions, Industrial & Logistics, Capital Markets, and Branch Head (Pune), Knight Frank India, said:
“2025 has been a landmark year for Pune’s office market. Strong leasing momentum led by GCCs and third-party IT/ITeS firms underscores the city’s growing role as a scalable and cost-efficient alternative to larger metros. Despite significant supply additions, demand depth and occupier confidence remain strong, reinforcing Pune’s long-term appeal as a strategic office destination.”
Residential Market: July–December 2025
Pune’s residential market entered a phase of measured consolidation in H2 2025 after several years of strong post-pandemic growth. Housing sales in H2 2025 declined marginally by 5% YoY to 26,552 units, while full-year sales stood at 50,881 units, reflecting a modest 3% YoY moderation. Demand remained largely end-user driven, with buyers becoming more selective amid rising prices.
New launches also moderated, with 29,559 units launched in H2 2025, down 6% YoY. For the full year, launches totalled 56,118 units, also reflecting a 6% YoY decline, as developers adopted a disciplined, corridor-focused approach, prioritising proven micro-markets over aggressive expansion.
Despite softer volumes, residential prices continued to rise, increasing 5% YoY to an average of INR 5,016 per sq ft in H2 2025. Price appreciation was supported by steady demand in West and East Pune, particularly in Baner, Wakad, Hinjewadi, Kharadi, and Hadapsar, which benefit from proximity to employment hubs and strong social infrastructure.
The INR 5–10 million segment emerged as the most active, accounting for 46% of residential sales in H2 2025, followed by the INR 10–20 million segment at 24%, indicating growing acceptance of higher-ticket homes. In contrast, homes priced below INR 5 million saw their share decline to 23%, highlighting a clear shift in buyer preferences.
Unsold inventory increased to 51,653 units, up 11% YoY. However, market health indicators remained comfortable, with Quarters-to-Sell (QTS) at 4.0 and the average age of unsold inventory at 11.7 quarters, suggesting that most stock remains fresh and marketable.
Summing up the residential outlook, P Vilas added:
“Pune’s residential market is clearly recalibrating. While volumes have eased after a strong multi-year run, price stability and sustained end-user demand in well-connected micro-markets continue to anchor the market. The growing dominance of mid and premium ticket homes reflects evolving buyer aspirations and confidence in the city’s long-term growth story.”
